There was a slight improvement in high street sales in the year to October according to the latest CBI distributive trades’ survey results. Businesses also expect volumes to improve further in November.
The improved results in volumes were greater than expected and the best figures since December 2007. A small percentage of retailers reported poor sales for the time of year, which was an improvement on last month, and they expect sales to remain below seasonal norms in November.
Stocks are more than adequate to meet demand but more orders are expected in November than were placed in October.
The sectors that have performed particularly well include durable household goods, furniture and carpets, booksellers and stationers. Clothing, footwear and leather retailers and grocers also reported sales growth. Sales fell for chemists and the hardware, china and DIY retailers.
The wholesale sector's sales volumes were flat for the second month running but better than the expected fall. Food and drink wholesalers reported strong sales growth, but industrial materials and builders merchants had a difficult month. The motor trades saw trade volumes fall and many expect sales to fall again in November. Vehicle sales, rather than parts and accessories were the main factor in the poor sales report.
Tuesday, 27 October 2009
Thursday, 22 October 2009
Manufacturing Returning To Growth
The CBI quarterly Industrial Trends survey results were released yesterday. They report that the decline in manufacturing output has slowed in the last three months and the prospects are brighter. Confidence is returning to the sector and growth is expected in the next quarter. The comparative weakness of the pound is also helping British companies to compete in export markets.
The volume of output from manufacturing fell again over the quarter according to a majority of companies responding to the survey though at a much slower rate of decline than in the last quarterly survey in July. A small majority of respondents also expect to see growth in the next quarter. Marginal growth is also expected in the domestic market even though demand has continued to slow. The contraction in demand for exports was less than expected and companies expect export orders to increase over the next three months. More businesses are optimistic about exports for the coming year than they have been since 1995. More and more businesses are also becoming more confident in the general business situation.
Destocking is continuing as stocks of finished goods fell at a record rate for a second time. Levels are more than adequate. Firms are planning to spend more on innovation over the next year. Expenditure on staff and training, plant and machinery is expected to remain unchanged.
The volume of output from manufacturing fell again over the quarter according to a majority of companies responding to the survey though at a much slower rate of decline than in the last quarterly survey in July. A small majority of respondents also expect to see growth in the next quarter. Marginal growth is also expected in the domestic market even though demand has continued to slow. The contraction in demand for exports was less than expected and companies expect export orders to increase over the next three months. More businesses are optimistic about exports for the coming year than they have been since 1995. More and more businesses are also becoming more confident in the general business situation.
Destocking is continuing as stocks of finished goods fell at a record rate for a second time. Levels are more than adequate. Firms are planning to spend more on innovation over the next year. Expenditure on staff and training, plant and machinery is expected to remain unchanged.
Friday, 16 October 2009
UK Harvest Data 2009
The NFU recently released data concerning the UK 2009 harvest reporting that production is down on the 5-year average by over a million tonnes. It is estimated that this year's wheat harvest will be around 13.9 million tonnes, 3.4 million tonnes lower than last year. The 5-year average for wheat is 15,106 million tonnes, from 1,921 hectares at 7.9 tonnes/hectare. The decrease is due to both lower sowing and lower yields. Farmers planted less cereals and oilseed rape and planted more lower input crops because of difficult autumn planting conditions, high input prices and declining forward prices. Together with drought affecting cereals in England, cereals output was down by 14%. Winter barley is down 300,000 tonnes to 2.5 million tonnes, spring barley is up 440,000 tonnes on last year to 3.8 million tonnes due to lower yields but a significant increase in sowing for 2009. Oilseed rape sowing decreased compared with 2008, but yields increased to give very similar results to last year.
UK Trade Deficit Down In August
The UK seasonally-adjusted trade deficit in August was £2.3bn, down from £2.6bn in July. The deficit in goods was £6.2bn and the surplus in services was £3.9bn. The seasonally-adjusted volume of exports excluding oil and erratics was 0.8% up and the volume of imports was 2.6% higher. Export prices of goods went up by 0.8% and imports by 1% in August compared with July.
The trade in services surplus increased by £0.1bn to £3.9bn in August. Exports in August increased by £0.1bn to £13.3bn and imports by less than £0.1bn to £9.4bn. Similarly, over the quarter to August, the surplus increased by £0.1bn to £11.5bn, exports increased by £0.1bn to £39.7bn and imports fell by £0.1bn to £28.2bn.
There were no export or import movements over £0.2bn within the G7 group but among other countries imports from South Africa fell by £0.3bn between July and August. Comparing the three months to August with the three months to May there were no export or import movements in excess of £0.4bn, but within the G7 countries, exports to France went up by £0.4bn and imports from the US fell by £0.7bn.
The trade in services surplus increased by £0.1bn to £3.9bn in August. Exports in August increased by £0.1bn to £13.3bn and imports by less than £0.1bn to £9.4bn. Similarly, over the quarter to August, the surplus increased by £0.1bn to £11.5bn, exports increased by £0.1bn to £39.7bn and imports fell by £0.1bn to £28.2bn.
There were no export or import movements over £0.2bn within the G7 group but among other countries imports from South Africa fell by £0.3bn between July and August. Comparing the three months to August with the three months to May there were no export or import movements in excess of £0.4bn, but within the G7 countries, exports to France went up by £0.4bn and imports from the US fell by £0.7bn.
Inflation Up By 1.1%
The consumer prices index (CPI) increased by 1.1% in the year to September 2009, from 1.6% in August. The retail prices index (RPI) fell by 1.4% in September, from 1.3% in August. The RPI excluding mortgages (RPIX), increased by 1.3% from 1.4% in August.
The largest contributor to the downward trend in the CPI was from housing and household services. Other large downward contributions came from food and non-alcoholic beverages where falling meat prices had the biggest effect. A small contribution came from fruit especially bananas. Restaurants and hotels prices changed little or nothing from a year ago. The downward effect came from restaurants and cafes where hotel accomodation prices have fallen this year. Another large downward effect came from recording media, particularly pre-recorded DVDs and games, toys and hobbies.
The upward effects in the CPI came from transport where the prices of fuels and lubricants increased between August and September. The price of petrol went up on average by 2.4%/litre this year to 106.2 pence. Diesel prices went up 2.5p/litre compared with a fall of 2.3p/litre last year. Another large upward contribution from within the transport sector came from the purchase of second-hand cars. Prices have gone up this year but fell last year. There was also a large upward contribution from clothing and footwear.
Fuel and light made the largest contributio to the downward trend in the RPI. Food also contributed to the trend with prices falling this year more than they did last year mainly due to non-seasonal food products. Motoring goods accounted for the main upward contribution. The purchase of motor vehicles and fuel were largely responsible and clothing and footwear. A smaller contribution was made by household goods particularly furniture.
The largest contributor to the downward trend in the CPI was from housing and household services. Other large downward contributions came from food and non-alcoholic beverages where falling meat prices had the biggest effect. A small contribution came from fruit especially bananas. Restaurants and hotels prices changed little or nothing from a year ago. The downward effect came from restaurants and cafes where hotel accomodation prices have fallen this year. Another large downward effect came from recording media, particularly pre-recorded DVDs and games, toys and hobbies.
The upward effects in the CPI came from transport where the prices of fuels and lubricants increased between August and September. The price of petrol went up on average by 2.4%/litre this year to 106.2 pence. Diesel prices went up 2.5p/litre compared with a fall of 2.3p/litre last year. Another large upward contribution from within the transport sector came from the purchase of second-hand cars. Prices have gone up this year but fell last year. There was also a large upward contribution from clothing and footwear.
Fuel and light made the largest contributio to the downward trend in the RPI. Food also contributed to the trend with prices falling this year more than they did last year mainly due to non-seasonal food products. Motoring goods accounted for the main upward contribution. The purchase of motor vehicles and fuel were largely responsible and clothing and footwear. A smaller contribution was made by household goods particularly furniture.
Thursday, 15 October 2009
Food Inflation Decreases Food Sales
The value of retail sales increased by 2.8% like-for-like from September 2008 partly due to the Bank Holidays falling in the September period this year according to the British Retail Consortium (BRC) Retail Sales Monitor for September. There was a further slow down in food sales due to food inflation. Other sectors that increased were clothing and footwear and homewares and furniture sales due to an increase in consumer confidence and the housing market. Internet sales of non-food goods helped achieve a figure of 11% higher than a year ago in September and 7.9% compared with August.
The BRC Shop Price Index stayed deflationary for the second consecutive month. Shop prices fell 0.1% in September year-on-year. Food inflation increased to 2.5% from 2.3% in August. On the monthly basis the index remained flat.
The BRC Shop Price Index stayed deflationary for the second consecutive month. Shop prices fell 0.1% in September year-on-year. Food inflation increased to 2.5% from 2.3% in August. On the monthly basis the index remained flat.
Labour Market Statistics For August 2009
The unemployment rate for the three months to August 2009 was 7.9%, up 0.3% on the previous quarter and 2.1% on the year. There were 2.47 million people unemployed, up 88,000 on the previous quarter and 677,000 on the year. The employment rate was 72.6% for the UK and the total number of people in employment was 28.95 million, down 0.3% on the previous quarter and 1.8% on the year. A total of 904.5 hours was worked in the quarter, down 14.3 million.
There were 434,000 job vacancies in the quarter a decrease of 163,000 on last year. The inactivity rate for people of working age was 21% or 7.97 million up 50,000 on the quarter and 80,000 on the year. In the three months to August 2009 there were 233,000 redundancies which is down 68,000 on the quarter but up 85,000 on the year. A total of 8 stoppages lost 36,000 working days in August.
The number of people working in manufacturing in the three months to August 2009 was 2.63 million, the lowest figure since 1978. Manufacturing productivity decreased by 2.2% and unit wage costs increased by 3.5% compared with the same period last year. Average earnings increased by 1.9%.
There were 434,000 job vacancies in the quarter a decrease of 163,000 on last year. The inactivity rate for people of working age was 21% or 7.97 million up 50,000 on the quarter and 80,000 on the year. In the three months to August 2009 there were 233,000 redundancies which is down 68,000 on the quarter but up 85,000 on the year. A total of 8 stoppages lost 36,000 working days in August.
The number of people working in manufacturing in the three months to August 2009 was 2.63 million, the lowest figure since 1978. Manufacturing productivity decreased by 2.2% and unit wage costs increased by 3.5% compared with the same period last year. Average earnings increased by 1.9%.
Wednesday, 14 October 2009
Productivity Comparisons For 2008
Data from the Office for National Statistics show that in 2008 UK GDP/worker was above Japan, similar to Canada and Germany, below that of France, Italy and the US and lower than the average of the G7 excluding the UK. On the basis of GDP/hour worked the UK is above Japan, similar to Canada and Italy but below France, Germany and the US.
The UK experienced faster productivity growth than all other G7 countries since 1991 by the GDP/worker measure. UK GDP/worker had grown by 39% since 1991 compared to the G7 average of 29%. UK GDP/hour worked increased by 49% between 1991 and 2007, the fastest growth of any G7 country for that period. The G7 average excluding the UK was 36%. GDP data for each country are coverted using purchasing power parities to make them comparable.
The UK experienced faster productivity growth than all other G7 countries since 1991 by the GDP/worker measure. UK GDP/worker had grown by 39% since 1991 compared to the G7 average of 29%. UK GDP/hour worked increased by 49% between 1991 and 2007, the fastest growth of any G7 country for that period. The G7 average excluding the UK was 36%. GDP data for each country are coverted using purchasing power parities to make them comparable.
Producer Prices Increase 0.4%
Output prices of manufactured products increased by 0.4% in the year to September compared to August when they fell by 0.3%. Prices increased over the month between August and September by 0.5%. The changes reflect increases in the prices of petroleum products of 2% and changes in duty on petroleum products which is estimated to have added 0.2% to the output index. Unleaded petrol is reported to have increased by 2.6% between August and September but decreased by 3.1% over the last year. Prices excluding excise duties fell by 0.6% over the year and increased by 0.4% on the month and excluding food, beverages, tobacco and petroleum increased by 1.4% over the year and 0.5% over the month.
Input prices for materials and fuels fell by 6.5% over the year to September and fell 0.5% over the month. It compares with a fall of 7.7% in the year to August. The manufacturing index fell 0.5% between August and September compared with 1.7% for the same time last year. The fall reflects the fall of 4.4% in the price of crude oil for the month and 24.1% over the year. Imported materials increased by 1% over the month to September offsetting the fall. The index excluding food, beverages, tobacco and petroleum fell by 1.7%.
Input prices for materials and fuels fell by 6.5% over the year to September and fell 0.5% over the month. It compares with a fall of 7.7% in the year to August. The manufacturing index fell 0.5% between August and September compared with 1.7% for the same time last year. The fall reflects the fall of 4.4% in the price of crude oil for the month and 24.1% over the year. Imported materials increased by 1% over the month to September offsetting the fall. The index excluding food, beverages, tobacco and petroleum fell by 1.7%.
OECD Survey Indicates Recovery
The OECD report that all major economies are pointing to recovery with France and Italy even pointing to potential expansion. The signs of potential expansion should be treated with care.
The OECD area leading indicator increased by 1.5% in August 2009 and was 0.6% higher than August 2008. The three main economies, the US, the 'eurozone', and Japan all reported increases in their indicators for August. The US increased by 1.6%, the euro area by 1.7% and Japan by 1.3%. Compared to last year however the US was 1.6% down, Japan was 3.9% down, but the euro area was 4.1% up. The UK increased by 1.6% in August and by 1.7% on last year. France increased by 1.3% in August and 6.6% on last year and Italy by 2% in August and 10.4% higher than last year. Germany increased by 2.4% in August and by 2.1% on last year.
The major emerging economies also increased in August. China increased by 1.5% and India by 0.9%. India was also 0.1% higher than last year whereas China was 0.7% lower. Russia increased by 1.1%, 10.2% down on last year. Brazil increased by 0.4% but was 8.5% lower than last year.
The OECD indicators are constructed from data that have similar fluctuations to the business cycle but precede it. Whereas the business cycle uses GDP data, the OECD use indices of industrial production.
The OECD area leading indicator increased by 1.5% in August 2009 and was 0.6% higher than August 2008. The three main economies, the US, the 'eurozone', and Japan all reported increases in their indicators for August. The US increased by 1.6%, the euro area by 1.7% and Japan by 1.3%. Compared to last year however the US was 1.6% down, Japan was 3.9% down, but the euro area was 4.1% up. The UK increased by 1.6% in August and by 1.7% on last year. France increased by 1.3% in August and 6.6% on last year and Italy by 2% in August and 10.4% higher than last year. Germany increased by 2.4% in August and by 2.1% on last year.
The major emerging economies also increased in August. China increased by 1.5% and India by 0.9%. India was also 0.1% higher than last year whereas China was 0.7% lower. Russia increased by 1.1%, 10.2% down on last year. Brazil increased by 0.4% but was 8.5% lower than last year.
The OECD indicators are constructed from data that have similar fluctuations to the business cycle but precede it. Whereas the business cycle uses GDP data, the OECD use indices of industrial production.
Monday, 12 October 2009
Manufacturing Output Unchanged
Manufacturing output was 'flat' in the quarter to August 2009 compared to the previous quarter according to Office for National Statistics latest Index of Production bulletin. The manufacturing index stood at 87.8. Between July and August the index had fallen by 1.9%. The overall production index was at 87.4 for the second quarter and 85.9 for August.
Over the quarter the 'flat' output resulted from increases of 7.8% in transport equipment, 9.3% in wood and wood products and 3.1% in the rubber and plastic products industries. Between July and August, the most significant decreases were 2.4% in the paper, printing and publishing services, 2.4% in the electrical and optical equipment services and 1.7% in food, drink and tobacco industries. Electricity, water and gas supply output increased by 0.1% over the quarter but between July and August it fell by 0.5%.
Consumer durables output fell by 1.4% on the quarter and 15.1% on last year. Between July and August it fell by 1%. Consumer non-durables output, including fmcgs, fell by 1.6% in the quarter and 3.2% on the year and between July and August fell by 1.9%. Capital items increased by 1.4% over the quarter but is 13.7% lower than last year. Between July and August capital items fell by 1.6%. Intermediate goods and energy was unchanged but 12.5% lower than last year. Out put decreased 3.3% between July and August.
Over the quarter the 'flat' output resulted from increases of 7.8% in transport equipment, 9.3% in wood and wood products and 3.1% in the rubber and plastic products industries. Between July and August, the most significant decreases were 2.4% in the paper, printing and publishing services, 2.4% in the electrical and optical equipment services and 1.7% in food, drink and tobacco industries. Electricity, water and gas supply output increased by 0.1% over the quarter but between July and August it fell by 0.5%.
Consumer durables output fell by 1.4% on the quarter and 15.1% on last year. Between July and August it fell by 1%. Consumer non-durables output, including fmcgs, fell by 1.6% in the quarter and 3.2% on the year and between July and August fell by 1.9%. Capital items increased by 1.4% over the quarter but is 13.7% lower than last year. Between July and August capital items fell by 1.6%. Intermediate goods and energy was unchanged but 12.5% lower than last year. Out put decreased 3.3% between July and August.
Tuesday, 6 October 2009
IMF World Economic Outlook October Report
Economic growth has turned positive after the deep global recession, according to the IMF's World Economic Outlook for October 2009. The main factors were wide ranging and unprecedented public interventions supporting demand and lowering uncertainty and risk in financial markets. They expect the recovery will be slow and subdued. Activity remains well below pre-crisis levels. Manufacturing and a turn in the inventory cycle are leading the recovery. Retail stability is returning and consumer confidence is growing. Looking beyond 2010 sustainable growth will depend on addressing the supply disruptions caused by the crisis and rebalancing global demand.
In the meantime, policies will have to remain focused on restoring financial health and maintaining supportive macro-economic policies until conditions improve still more. Policy makers should prepare to reduce the level of public intervention. They will have to map a course between reducing public interventions to early, risking the progress made so far, or leaving them in place too long, distorting incentives and public balance sheets. Emerging and developing economies are further ahead in the recovery due to the successes of some Asian markets. Eastern European emerging economies have been among the hardest hit and their recovery may be slower.
In the meantime, policies will have to remain focused on restoring financial health and maintaining supportive macro-economic policies until conditions improve still more. Policy makers should prepare to reduce the level of public intervention. They will have to map a course between reducing public interventions to early, risking the progress made so far, or leaving them in place too long, distorting incentives and public balance sheets. Emerging and developing economies are further ahead in the recovery due to the successes of some Asian markets. Eastern European emerging economies have been among the hardest hit and their recovery may be slower.
Monday, 5 October 2009
Services Output Unchanged In July
The July survey of Services shows that between June and July service sector output was unchanged. While four of the five components increased, one decreased. The decrease was in business services and finance. Over the three months there was a decrease of 0.2%. Three of the five components decreased, the most significant was business services and finance which decreased by 0.4%. Distribution services increased by 0.5%.
Increase In Balance Of Payments Deficit
Balance of payments estimates for the second quarter of 2009 were released last week by the ONS. The current account showed a deficit of £11.4bn up from £4.1bn in Q1. These figures equate to -3.3% of GDP. The increase in the deficit was due partly to a decline in the income surplus by £5.6bn to £1.4bn, surplus on trade in services decreasing to £11.3bn and an increase in current transfers of £0.5bn to £4.2bn.
The trade in goods deficit was £19.9bn, the trade in services surplus was £11.3bn. Income surplus was at £1.4bn, UK earnings on investment abroad fell by £9.1bn to £38.1bn, foreign earnings on investment fell by £3.7bn to £36.5bn. Direct investment income surplus was £7bn, down £7.1bn. Earnings on direct investment abroad were £12.7bn partly due to losses of UK monetary financial institutions losses. Earning on direct investment in UK were up by £4bn to £5.7bn mainly due to foreign banks reporting smaller losses than in the last quarter. A portfolio investment income balance of near zero was recorded. There had been a deficit of £1.9bn. UK earnings on portfolio investment abroad fell to £15bn and foreign earnings on portfolio investment fell to £15bn. The increase in current transfers deficit was mainly due to a rise in debits from UK payments to EU institutions which, it has to be said, can be erratic.
The trade in goods deficit was £19.9bn, the trade in services surplus was £11.3bn. Income surplus was at £1.4bn, UK earnings on investment abroad fell by £9.1bn to £38.1bn, foreign earnings on investment fell by £3.7bn to £36.5bn. Direct investment income surplus was £7bn, down £7.1bn. Earnings on direct investment abroad were £12.7bn partly due to losses of UK monetary financial institutions losses. Earning on direct investment in UK were up by £4bn to £5.7bn mainly due to foreign banks reporting smaller losses than in the last quarter. A portfolio investment income balance of near zero was recorded. There had been a deficit of £1.9bn. UK earnings on portfolio investment abroad fell to £15bn and foreign earnings on portfolio investment fell to £15bn. The increase in current transfers deficit was mainly due to a rise in debits from UK payments to EU institutions which, it has to be said, can be erratic.
Latest Investment Quarterly And GDP Revised Figures
Business investment fell by 10.2% during the second quarter of 2009 and was 21.8% lower than the same time last year. The figure is £29,278 million, down from £32,598 million in Q1 2009. Manufacturing investment fell by 16.2% according to revised figures and by 21.4% on last year with a figure of £2,853 million.
Estimates of GDP from July have been revised. GDP growth from Q2 2009 has been revised up to show a fall of 0.7% (from 0.6%) The revised volume of output shows a fall of 0.6% rather than 0.7% as first estimated. Manufacturing ouput was also revised up to 0.2% from 0.3% as published last month.
Estimates of GDP from July have been revised. GDP growth from Q2 2009 has been revised up to show a fall of 0.7% (from 0.6%) The revised volume of output shows a fall of 0.6% rather than 0.7% as first estimated. Manufacturing ouput was also revised up to 0.2% from 0.3% as published last month.
Friday, 2 October 2009
Fall In Productivity In Q2 2009
The productivity statistics for the second quarter of 2009 were released by the ONS on Wednesday. They show that whole economy output per worker decreased by 3.9% in the second quarter of 2009 from a fall of 4.4% in the previous quarter. Quarter-on quarter output per worker increased by 0.3% in Q2 after a fall of 2% in the previous quarter. Unit wage costs in Q2 for the whole economy increased 5.7% compared with Q2 2008. They increased by 1.6% on the first quarter and 1.5% on the previous quarter.
Using output per hour worked, an alternative measure of productivity, Q2 2009 saw a decrease of 3.4% for the same quarter a year ago and total hours worked fell by 2.4%.
Manufacturing output/hour decreased by 2.7% and services by 3.3% in Q2 2009. Services output/job decreased by 3.6%. The increase in the contraction rate of services productivity is partly due to an increase in the contraction rate of output partly offset by an increase in the contraction rate of services jobs.
Using output per hour worked, an alternative measure of productivity, Q2 2009 saw a decrease of 3.4% for the same quarter a year ago and total hours worked fell by 2.4%.
Manufacturing output/hour decreased by 2.7% and services by 3.3% in Q2 2009. Services output/job decreased by 3.6%. The increase in the contraction rate of services productivity is partly due to an increase in the contraction rate of output partly offset by an increase in the contraction rate of services jobs.
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