UK Investment Down By 2.5% On 2009

The amount of capital expenditure made by UK firms fell by 2.5% to £29.6bn in the fourth quarter of 2010 compared with the same period of 2009. Manufacturing firms investment increased by 4.6% to £2.7bn and non-manufacturing investment decreased by 3.1% to £26.9bn.

Services Index Fell At The End Of The Year

The services index from the ONS fell 0.6% in December 2010. Four of the five components fell with business services and finance with a fall of 0.8% making the largest contribution to the decrease.

GDP Down More Than Expected

GDP in terms of volume decreased by 0.6% in Q4 2010 which is a downward revision of the decrease of 0.5% published in January. Production industries increased by 0.7% but services decreased by 0.7% and construction decreased by 2.5%. The GDP deflator is 2.8% above the sdame quarter of 2009. Household expenditure was down 0.1% in real terms and gross fixed capital formation down by 2.5%. The very bad weather is partly to blame for the change in GDP.

Cattle, Sheep And Pigs Up On Last Year

Prime cattle slaughter numbers were up 15% on January last year to 209,000 head in January 2011. Beef and veal production were up 20%. Sheep numbers were up 5% with mutton and lamb up 10% on last year. Clean pigs slaughter numbers were up7% on January 2010 at 906,000 head. Pigmeat production was 75,000 tonnes, up 8% on last year.

Public Sector Statistics Show An Unexpected Budget Surplus

The provisional estimates in the latest statistics release from the ONS on public sector finances shows that there was a current budget surplus of £8.5bn in January 2011 and net borrowing of -£3.7bn. At the end of January 2011 net debt was £867.2bn or 57.6% of GDP.

January Better On High Street Sales

The value of retail sales in January was 8.2% up than January 2010 and the volume was up 5.3%.

In predominantly food stores the value of sales was up 2.7% but the volume was down 2.3%. In predominantly non-food stores the value of sales was 9.1% higher than the same month in 2009 and volume was 9.5% higher over the same period. Fuel sales were up 21.6% in value but only 6% in volume. Non-store retailing was up 21.3% in value and 22.1% in volume.

The prices of retail sales were estimated to have been 2.7% higher than January 2010. The value of Internet sales in January 2011 was estimated to have been £523m or 10% of total retail sales.

Two factors affecting the pattern of retail sales were the bad weather conditions and the increase in VAT.

Milk Intake Down 1.5% On Year

The key results from the latest milk utilisation release from Defra says that the intake of raw milk in December 2010 was 784m litres, a decrease of 1.5% on December 2009. A total of 233m litres of milk was separated for skim milk (200m litres) and cream (33m litres) leaving a total of 550.9m litres of milk available for disposal as other dairy products. The amount used for the production of liquid milk was 341m litres of whole milk and 124m litres of skim milk. Cheese production accounted for 149m litres of whole milk and 22m litres of skim milk. Other disposals of the raw milk intake included powders, yogurt and condensed milk which accounted for 24.3m litres.

TB Incidence Fall In November 2010

There was a reduction in the incidence rate for TB in cattle in November 2010 over November 2009 but the figures are subject to further revision. New incidents increased by 2.3% between January and November 2010 compared with the same period in 2009. The provisional overall decrease over the period was 4.7% taking into consideration the increase in the number of herds tested. The average confirmed incidence rate was 4% in January - November 2010 compared with 4.3% for the same period in 2009.

A total of 8,196 tests were carried out on herds. The number of herds under movement restrictions was 3,655. There were at total of 6,759 tests carried out on unrestricted herds of which 518 were new herd incidents of which 271-333 were new confirmed incidents. The provisional number of tests carried out on unrestricted herds resulting in a confirmed new herd incident was between 4-4.9%.

The total number of animals involved was 808,176 cattle and 3,842 cattle were compulsorily slaughtered of which 3,782 were slaughtered as reactors and 60 as contacts.

Unemployment Up To 2.49m

The unemployment rate for October to December 2010 was 7.9% or 2.49m unemployed people. Youth unemployment (18-24 year olds) was 762,000 and is at its highest since 1993.

There were 29.12 employed people and an employment rate of 70.5%. Inactivity was at 23.4% or 9.36m inactive people. The public sector employed 6.01 people in September 2010, 33,000 down from June and the number of people employed in the private sector was 23.11m unchanged from June 2010.

Actual hours worked totalled 924.6m in the three months to December, 3% up on the three months to September. Average weekly hours worked in the three months to December totalled 31.8, up 0.2 from three months to September 2010.

Total pay, which includes bonuses, went up by 1.8% on the year earlier and regular pay went up by 2.3% on the year earlier. Private sector average total pay was £447/week in December 2010 and public sector pay average weekly earnings was £467. Average regular pay in the private sector was £419/week and in the public sector £467/week. The claimant count was 1.46m up on the quarter but down on the year.

Productivity was up 1.7% in Q3 2010 compared with Q3 2009 and whole economy wage costs fell by 0.5% over the same period.In December 2010, 7,000 working days were lost because of 14 stoppages in labour disputes and over the year 365,000 days lost from 88 stoppages.

There were 30.7m workforce jobs in September 2010, up on the quarter but down over the year with most jobs increases in accomodation and food services activities and between November 2010 and January 2011 there were 500,000 vacancies (503,000 in same period 2009) and a vacancy ratio of 1.9 per 100 employee jobs. Redundancies totalled 145,000 in the three months to December 2010 unchanged on the previous three months but down 23,000 from a year earlier or 5.8 per 1000 employees.

Inflation Up To 4%

The latest inflation data from the ONS says that CPI annual inflation now stands at 4% from 3.7% in December. The government target for CPI is 2%. The main contributory factors were petrol and diesel prices, restaurants and cafes, furniture and furnishings, alcoholic beverages and vehicle purchases. Two important factors that also made an impact were the increase in VAT and the price of crude oil. Downward pressure on the CPI came from recreation and culture, banking services and clothing and footwear. The RPI increased from 4.8% in December to 5.1% in January 2011.

The all items CPI hasn't been higher since November 2008, non-alcoholic beverages, restaurants and hotels and petrol haven't been higher since records began.

European Production Down In December

Industrial production fell by 0.1% in Europe in December in both the euro area and the EU27 compared with November 2010. When December 2010 is compared with December 2009 industrial production increased by 8% in the euro area and 7.7% in the EU27. The average production index increased by 7.1% in the euro area and 6.7% in ther EU27 over the same period.

Looking at the main industrial production sectors in the monthly comparison energy grew by 2.4% in the euro area and 1.7% in EU27. Non-durables fell by 0.3% in the euro area and 0.2% in EU27 and durables decreased by 1% and 0.1% respectively. Intermediate goods fell by 1.3% in both areas. The annual comparison shows that capital goods grew by 14.8% in the euro area and 14.5% in the EU27 while intermediate goods grew by 7.8% and 7.9% respectively. Energy increased by 5.8% in the euro area and 3.8% in EU27. Non-durables grew by 1.9% in the euro area and 2.5% in EU27 and durables by 2.1% and 1.8% respectively.

Big Increase In The Price Of Inputs

Output prices in manufacturing increased by 4.8% in the year to January 2011 compared with 4.1% last month. Month on month the output price index rose by 1%. Petrol, food and chemicals were the main items responsible for the increase. Input prices increased by 13.4% over the year to January, the highest increase since 2008, compared with 12.9% last month, excluding the more volatile products the increase was 9.9%. Month on month the total input price index increased by 1.7%.

Depression Expected To Continue For Some Time

The latest National Institute of Economic and Social Research (NIESR) estimate of GDP suggests that output fell by 0.1% in the three months to January 2011 following the 0.5% decline in the three months to December 2010. Month on month estimates suggest growth of 0.6% due to recovery from the severe weather conditions at the end of the year. The depression, to use the term the NIESR prefers to recession, is expected to continue for some time. The sector contributing most to the decline was construction with a fall of 12.2% following from a fall of 12.6% in the quarter ending last month over the previous quarter. Industry increased by 3.7%, agriculture by 1.3% and services by 0.3%. Agricultural output remained the same at 89.7 as did contruction at 95.7. Services increased output from 100.8 to 102.1.

UK Trade Takes A Dip In December

The seasomally adjusted deficit for UK trade increased in December 2010 from November's deficit of £3.9bn to £4.8bn. The deficit in goods was £9.2bn an increase of £0.7bn from the £8.5bn deficit in November. Services was in surplus again at £4.4bn down slightly from the £4.5bn reported in November.

The volume of exports was 1.3% lower in December and the volume of imports was 1.4% higher than in November. Both import and export prices rose in December. Exports rose by 1.1% and imports by 1.5%.

Farm Diversification In England 2009/10

A release from Defra giving estimates from the Farm Business Survey 2009/10 shows that about half of ther total number of farms accounted for 91% of farmed land and 96% of agricultural production. The main results from the survey are that 50% of farms diversified in 2009/10 and 27% diversified in other than letting out buildings.

The overall percentage of farms with any diversified activities has remained stable since 2006/7. The total income from diversification was £360m in 2009/10 which accounted for 15% of total farm income in 2009/10. On 23% of farms diversification provided more income than the rest of the farm. The most common type of diversification is letting out buildings for non-farming use at 36% and on the farms it generates 73% of total diversified income and over half diversified output. More farms ceased to diversify in 2008/9 than started with 3,100 discontinuing and 2,500 starting for the first time.

Regional variations exist and 73% of farms in the South East have diversified enterprises whereas only 41% of farms in the North West diversified. In most regions total income from diversification was 15% but in the South East it was 36%. The are with the lowest % of farm income from diversification was the East Midlands with 8%. In the North East and Yorkshire/Humberside it was 15% (second after the South East). After the letting of buildings for non-farm use, sport and recreation was a popular form of diversified activity with an incidience rate of 19% in the South East and 11% nationally and 14% of farms in the South East also had enterprises involving the processing and retailing of farm produce. Other popular activities included tourist accomodation and catering at 5%.

Average income from off-farm employment and self-employment was highest on very large farms at £21,400 per farm. The biggest age groups with diversified activities were the 55-64 and 65 and over age groups and the 55-64 age group has the largest share of output from diversified enterprises at £270m.

The average diversified output was £25,800 but 53% of diversified enterprises had an output value of less than £10,000 and 10% less than £1,000 and 12% have an annual output of £50,000 or more. Total farm income fell in 2009/10 after increasing for the previous four years.

Milk Prices Up 1.44p/litre In December

The latest milk prices release from Defra and the ONS shows that in December 2010 the average UK farm gate price of milk was 26.14p/litre, an increase of 1.44p/litre on December 2009. The butterfat content on average was 4.15% compared with 4.1% in 2009 and the average protein content in December 2010 was 3.37% compared with 3.32% in December 2009.

GDP Down An Estimated 0.5% In Q4 2010

GDP for the fourth quarter of 2010 decreased 0.5% after 0.7% growth in Q3 according to the preliminary estimates from the ONS. In the three main sectors of the economy, production increased by 0.9%, services decreased by 0.5% and construction decreased by 3.3%. The largest contributors to the negative growth in the quarter were business services and finance, construction and distribution, hotels and restaurants.

Other quarter on quarter growth percentages include agriculture which increased by 0.3% after decreasing by 0.3% last quarter and 1% in the same quarter last year.

Budget Deficit Up To £13.5bn In December

Public finance statistics from the ONS show that the public sector had a current budget deficit of £13.5bn in December 2010 compared with £12.8bn in 2009 and net borrowing of £16.8bn compared with £21bn in 2009 (all excluding the temporary effects of financial intervention). The net debt at the end of December was £889.1bn (£743.5bn in 2009) or 59.3% of GDP.

November Services Index Up 1.5%

The seasonally adjusted index of services for November 2010 on 2009 increased by 1.5% to 102.4. The percentage change for the most recent three months on a year earlier was 1.9% and for the most recent three months on the previous three months the percentage change was 0.5%.

All of the components increased in the most recent month on same month a year. Government and other services increased of 1.6%, distribution output increased 2.6% with wholesale on 4.5%, both transport, storage and communication and business services and finance increased by 1.1% and hotels and restaurants by 0.4%. All five components also increased in the most recent three months on a year earlier, and the most recent three months on the previous three months but when looking at the most recent month on the previous months three components, hotels and restaurants, business services and finance and government and other services, decreased.