Euro Area Trade In Balance

The first estimate from Eurostat for euro area trade with the rest of the world in May 2011 was in balance. There was a deficit of 4.9bn euros for the same period last year. In April 2011 the deficit was 4.8bn euros. The EU27 is estimated to have had a deficit of 13.2bn euros in May 2011 compared with -16bn euros in May 2010. The April balance was a 16.4bn euros deficit in 2011 compared with 12bn euros deficit in 2010. The euro area's main trading partners between January and April 2011 in euro terms were the United States, United Kingdom and China. Russia saw a 33% growth in imports from EU17. The main trading partners with the EU27 were the United States and China.

Inflation Down To 4.2%

The latest bulletin from the ONS on consumer inflation says that annual inflation has fallen to 4.2% in June 2011 from 4.5% in May. The government target is 2%. Recreaton and culture provided the main downward pressure for the decrease. In particular games, toys and hobbies were the main contributor along with pressure from audio visual equipment price discounting. Upward pressure came from a variety of food products.

The CPI fell by 0.1% between May and June 2011 due mainly to downward pressure from recreation and culture particularly computer games, photographic equipment, data processing equipment, recording equipment and books and also from clothing and footwear as some summer sales began in women's fashion. Upward pressure came from food and drink mainly bread and cereals, meat and milk, cheese and eggs. Mineral waters, soft drinks and juices helped to offset the increase. The RPI stands at 5% in June.

Increase In UK Trade But Deficit Goes Up

The UK trade balance deficit increased from £3.1bn in April to £4.1bn in May due to a larger increase in imports than exports which also increased in May. The deficit on trade in goods was £8.5bn in May compared with £7.6bn in April and the surplus on trade in services was £4.4bn in May compared with £4.5bn in the previous month. Both the volume of exports and the volume of imports increased in May. Export volume increased by 1.9% and import volume by 6%. Prices of exports fell by 1.7% and the prices of imports fell by 0.4% which meant a decrease in the terms of trade.

Cereal Usage Down In May

The total amount of wheat milled in May 2011 was 535,000 tonnes, down 0.1%. Brewers, maltsters and distillers usage of wheat was down 7% to 47,000 tonnes. The total amount of barley used by brewers, maltsters and distillers was up by 14% to 153,000 tonnes.

The total amount of oats milled in January to March 2011 compared with the same period in 2010 was up 8% to 120,000 tonnes.

Animal Feed Production Down In May

The animal feed statistical notice from Defra for May shows that animal feed retail production in May 2011 was down 3.4% compared with May 2010. Raw material usage in the retail production of animal feed was also down 3.3% compared with the same period last year. Total integrated feed production was down 0.1%.

The quarterly average prices of animal feedstuffs for January to March were also included in the bulletin. Cattle and calf feed was on average £207/tonne, pig feed was £250/tonne and sheep feed was £203/tonne.

Production Down By 0.8%

The index of production produced by the ONS fell 0.8% in May this year compared with May last year. In the month between April and May the index rose by 0.9%. Manufacturing increased by 2.8% in May over the year and by 1.8% over the month between April and May 2011.

The main contribution to the upward movement in manufacturing was a 3.8% increase in the manufacture of machinery and equipment and other machinery which increased by 7.2%.

Factory Gate Prices Up 5.7%

The producer prices index from the ONS tells us that factory gate prices for home sales of manufactured goods increased 5.7% in the year June compared with 5.4% in May. The price excluding the more volatile sectors such as food, beverages, tobacco and petroleum increased by 3.2%. The output price excluding excise duty increased by 5.8%.

Over ther month between May and June the output price index rose by 0.1%. The increase mainly reflects increases in the prices of food and other manufatures.

Fall In Industrial Producer Prices In EU

The industrial producer prices index published by Eurostat fell by 0.2% in the euro area and by 0.3% in the EU27 in May compared with April 2011. When comparing May 2011 with May 2010 the IPP index rose by 6.2% in the euro area and by 78.1% in the EU27.

Energy prices fell by 1.1% in the euro area and 1.3% in EU27 over the month.Non-durables increased by 0.3% in both areas, durables increased by 0.1% in the euro area and remained stable in the EU27. Capital goods also remained stable while intermediate goods increased by 0.2% in the euro area and by 0.3% in the EU27.

Milk Price Rises 2.7p/litre

The farm gate price of milk increased by 2.7p/litre to 26.34p/litre in May 2011. The average butterfat content of UK milk was 3.91% compared with with 4.02% in April and 3.8% in May 2010 and the average protein content was 3.24% compared with 3.22% in April and 3.27% in May last year.

GDP Growth Unrevised At 0.5%

The most recent quarterly national accounts show that GDP rose by 0.5% in Q1 2011. In volume terms GDP rose by 1.4%. The household saving ratio fell from 5.1% to 4.6% while household disposable income fell by 0.8%. Agricultural output increased by 0.1%.

Business Investment Down On Quarter Up On Year

Total business investment fell by 3.2% to £30bn in Q1 2011 compared with Q4 2010. Manufacturing investment fell by 4.4% to £2.8bn on the previous quarter but compared with the same quarter in the previous year increased by 14.8%. Non-manufacturing investment also fell, by 3.1% to £27.3bn but compared with Q1 2010 increased by 1.7%.

Fall In Balance Of Payments Deficit

The current account reported a deficit of £9.4bn for the first quarter of 2011 equivalent to -2.5% of GDP. The deficit for Q4 2010 was £13bn. There was a deficit of £15bn with the EU compared with £16.9bn in Q4 2010. Trade in goods was -£22.2, trade in services showed a surplus of £13.8bn. Income fell from £7.4bn in Q4 2010 to £4.6bn in Q1 2011. The capital account balance was £0.6bn.

Services Growth 0.8%

The index of services rose by 0.8% in April 2011 compared with April 2010. Transport, storage and communication services made the largest contribution with an increase of 3.7% within which air transport increased by 23.3%.

Services Productivity Falls While Economy Grows

Statistics released by the ONS show that whole economy labour productivity in terms of output per worker increased by 0.3% in the first quarter of 2011 compared with the same quarter a year ago while output per hour also increased by 0.3%. Unit wage costs increased by 0.6%. Output per job in the manufacturing sector increased by 4.4%. while in the service sector it fell by 0.5%.

Natural Resources And Environmental Accounts

The ONS recently published the UK's environmental accounts for 2011 and they are described as satellite accounts to the main national accounts. They provide information on a wide range of things to do with atmospheric emissions, natural resources such as lands cover, oil and gas reserves, forestry, trade in basic materials, physical flows and monetary accounts related to the industrial, commercial and domestic sectors.

The effects of our activity on the environment have been an important policy issue for the last 40-50 years. There is growing concern about the impact of economic activity on both the global and local environment and also recognition that economic growth and human welfare depend on the enviroment. Raw materials and energy for goods and services, the absorption of waste, basic life support roles and amenities such as landscape are all services provided by the environment.

Environmental accounts provide data on the impact of economic activity on the environment, resource use and the taxes and subsidies associted with them and are sepearated into three dimensions: natural resources, physical flows and monetary. Natural resources accounts include oil and gas reserves, land cover and forestry.

Proven oil reserves at the end of 2009 were 378m tonnes. There has been a transfer of 38m tonnes from probable to proven reserves. Maximum oil reserves (proven, probable and possible) decreased by 19m tonnes to 1,111m tonnes in 2009. There are estimated to be hundreds of millions of tonnes of undiscovered recoverable oil reserves. Oil and gas reserves were worth an estimated value of £182.4bn in 2009, down 1.9% since 2008.

Total land cover in Great Britain is 22.6m hectares. Various types of grassland are the habitats that have increased between 1998 and 2007. Changes have also taken place in woodlands which have increased, arable and horticulture, which have decreased and bracken broad habitat which has also decreased.

The total area covered by woodland was 3.1m hectares or 12.7% of UK land area and is the highest since records began. The woodland area at the end of 2010 is 2.5 times tha area covered in 1924 (when records began). The area of new planting and restocking in 2010-11 was 22,700 hectares. Broadleaved species important for the expansion of the area of native woodland was 82% of new planting but only 27% of restocking.

There was an 8.4% decrease in greenhouse gas emissions in 2009 compared with 2008 bringing the total down by 58.1m tonnes to 636m tonnes of CO2 equivalent.

Material productivity is used to assess progress towards sustainable development by dividing GDP by Domestic Material Consumption (DMC). The environmental accounts show that between 1990 and 2009 material productivity increrased and the trend indicates that material use is falling in relation to economic activity and supports evidence that suggests that economic growth has decoupled from material use since 1990. Some of the environmental impacts associated with consumption may have been transferred abroad because the level of imports has generally risen over that period.