Business Services Drive Up Services Index

The index of services (seasonally adjusted) increased by 1.2% in September 2011 compared with a year earlier. Business services and finance increased by 1.5% ands accounted for 38% of services, government and other services increased by 1.6% and accounted for 29%, distribution, hotels and restaurants which accounts for 18% remained unchanged and transport, storage and communication increased by 1.5% and accounted for the other 15% of services.

Manufacturing Keeps Up Investment

Manufacturing investment increased by 15.7% over the quarter and by 31.7% over the year to Q3 2011 according to the latest business investment bulletin from the ONS.

Total business investment actually fell by 1.4% to £30.2bn over the previous quarter. Non-manufacturing investment fell by 3.4% over the quarter. Business investment rose over the quarter by 0.3%.

The increase in overall manufacturing was mainly due to an increase of 66.9% in metal goods, 61.8% in other manufacturing and 21.8% in engineering and vehicles in private sector manufacturing which increased by 15.7% to £3.7bn. The fall in investment was mainly due to the a in private sector non-manufacturing which fell 4.4% to £25.4bn.

GDP Grows By 0.5% In Q3

The second estimate of GDP for the third quarter of 2011 was published by the ONS recently. The headline figure for GDP in Q3 2011 increased by 0.5%.

Analyzed by output, the production industries rose by 0.4% compared with a fall of 1.2% in Q2, mining and quarrying increased by 0.4% and manufacturing output rose by 0.2%. According to the income analysis GDP at current market prices rose by 1.5% and compensation of employees increased by 1.2%. The expenditure analysis suggests that GDP increased by 0.9% in Q3. Household final consumption expenditure remained unchanged. The level of household expenditure is 1.5% lower than Q3 2010.

Industrial New Orders Down By 6.4% In EA17

The index for industrial new orders for the euro area fell by 6.4% in September 2011 compared with August according to Eurostat. In the EU27 the index fell by 2.3%. If the more volatile sectors are excluded the falls were 4.3% in the euro area and 2.1% in the EU27. The annual comparison however recorded increases of 1.6% in the euro area and 2.3% in the EU27 in September 2011.

Central Government Borrowing Down In October

Provisional estimates for public sector net borrowing put the borrowing figure for October at £6.5bn. Borrowing in the same period last year was £7.7bn. The net debt stands at £966.6bn or 62.3% of GDP which is an increase on 2010 when net debt was £836.8bn, 56.5% of GDP. The current budget was £4.5bn in deficit, £0.2bn down on the previous quarter.

Borrowing by central government actually fell by £1.2bn from £7.2bn to £6bn whereas local government borrowing increased from £0.7bn to £1.3bn.

Services Prices Up In Q3

The net sector aggregate of selected services producer prices indices 12 month inflation figure rose by 2.4% in the third quarter of 2011 and the gross sector aggregate also rose by 2% according to the latest statistical bulletin from the ONS. The net sector aggregate fell 0.1% between the second and third quarters and the gross aggregate by 0.2%. The 0.1% fall reflects decreases in prices in freight forwarding, advertising placement and sea and coastal water freight.

The services PPI (formerly the Corporate Services Price Index or CSPI) measures changes in the prices of services provided by UK businesses to other UK businesses and government.

An Increase In Agricultural Price Indices In September

The index of prices received by producers for the total of all agricultural products for September 2011 was 165.7, up from 159.2 in August.

The index of prices paid by producers for the total of all means of agricultural production for September 2011 was 153.1, up from 153.0 in August. The slight increase in purchase prices being covered by the larger increase in production prices. There was an increase in the price of fuel. Confidence is returning to cereals markets after fears of bad harvest weather subsided and prices retruned to normal after increasing earlier in the year. Potato prices started well this year as bad weather reduced availability. News of adequate harvests reduced fears and prices came down again.

Milk prices have increased steadily over the last 18 months with good demand and supply ensuring a good market. Good market conditions also apply to the beef market. Sheep and lamb prices have been sustained but prime prices are beginning to tail off.

Internet Users Increase To 82.9%

The number of people in UK who have ever used the Internet increased to 41.62m adults in Q3 2011, equivalent to 82.9% of the adult population. The remainder were the 8.43m adults or 16.8% of the population who have never used the Internet.

Socio-economic and demographic characteristics are linked to Internet use. Age, disability, location and earnings are example characteristics of Internet users. The never using the Internet include the over 65s, the disabled and the widowed.

The largest proportion of users according to age were the youngest aged 16-24 at 98.6%. The over 75s group decreased in its number of non-users from 76.3% to 72.4%. There were 4.25m disabled adults who had never used the Internet (over half of the total non-users).

As regards earnings the proportion of Internet non-users declines with successive weekly pay bands. Those on less than £200/week had the most non-users at 8.3%. There were no Internet non-users among those paid over £1,000/week.

Unemployment Rate 8.3%

The unemployment reached the highest it has been since 1996 at 8.3% or 2.62m people, an increase of 129,000 on the quarter. The 2.62m figure is the highest since 1994.

There were 29.07m people in employment aged 16 and over, a decrease of 197,000 on the quarter. There were 31.16m workforce jobs in June 2011, down 102,000 on the quarter. Workforce jobs measured jobs filled. It differs from the employment figure because some people have more than one job.

The number of redundancies fell by 7,000 to 147,000 over the three months before the survey. The redundancy rate was 5.9/1,000. The number of vacancies increased by 7,000 to 462,000 in the three months to October 2011. There were 1.8 jobs to every 100 employee jobs during that period.

Retail Sales Up In October

The value and volume of retail sales increased in October 2011 according to the retail sales survey carried out by the ONS. The value of retail sales in October 2011 showed an increase of 5.4 per cent compared with October 2010 and sales volumes in October 2011 increased by 0.9 per cent compared to October 2010.

Food stores volumes increased for the first time since April. The average amount spent weekly on online retailing increased to £561.5m up from £518.7m in September 2011

Producer Prices For October

The producer price index for October was published recently by the ONS. The survey suggests that in the year to October the factory gate prices for sales of manufactured products increased by 5.7%. The index excluding food, beverages and tobacco rose by 3.4%. Over the month between September and October the index remained unchanged. The input price index rose by 14.1% on the annual comparison and fell by 0.8% on the monthly comparison.

Transport Helps Manufacturing Increase By 2%

The index of production published by the ONS fell by 0.7% in September 2011 compared with September 2010. The manufacturing index rose by 2.0%, increasing in 8 of the 13 sub-sectors and falling in 5. The transport equipment industries contributed the most to the increase, the manufacture of motor vehicles, trailers and semi-trailers making the biggest contribution within the sub-sector.

In the monthly comparison between August and September 2011, production remained unchanged with manufacturing rising by 0.2%. The index of production rose by 0.4 per cent in Q3 2011.

September Retail Trade Down In Europe

The volume of retail trade in Europe fell in both the euro zone and the EU in general in September when compared with August 2011. The year on year retail sales index also fell in both areas.

Volume fell by 0.7% in the euro area and 0.3% in the EU27 during the month between August and September. The non-food sector fell by 0.8% in the euro area and 0.9% in the EU while food, drink and tobacco remained unchanged in the euro area and rose by 0.1% in the EU27. The total retail trade index fell in 11 of the member states and rose in 8. The highest decreases were in Portugal (-3.7%), Slovenia (-2.1%) and Spain (-1.7%) and the largest increases were in Poland (2.4%), UK (1%) and Latvia (0.9%).

The index fell by 1.5% in the euro area and 0.8% in the EU27 when comparing 2010 and 2011. The food category fell by 0.5% in the euro area and 0.4% in the EU as a whole. The non-food sector fell by 1.9% and 0.8% respectively. The highest decreases were in Malta (-7.5%), Portugal (-6.2%) and Spain (-5.8%). The highest increases were in Lithuania (10.6%), Luxembourg (8.3%) and Latvia (8.1%).

Inflation In The OECD Continues To Rise In September

Consumer prices in the OECD countries continued to rise in September by 3.3% after a 3.2% increase in August. It is the highest rate since October 2008. The 5.2% rise in inflation in the UK in September was mainly due to the 18.1% rise in energy prices in September after a 12.3% rise in August. It is back to the peak of September 2008, the highest since records began in January 1997. Consumer price inflation also increased in Italy (3%), Germany (2.6%), the US (3.9%) and Canada (3.2%). In France prices remained stable but in Japan prices fell by 0.2% to 0%. In Europe, the HICP increased to 3%.