Weak July for UK industrial production and trade

Two reports published today by the Office of National Statistics (ONS) show relatively weak UK data for the month of July – in production (including manufacturing) and in trade in goods and services.  The July data (if confirmed in the coming weeks) are likely to have a slight braking effect on GDP for the third Quarter of 2015.

In a nutshell, July production fell 0.4% from the June figure, with manufacturing falling 0.8% on the month.  The trade deficit for goods and services widened by £2.6 billion over the June figure.

Germany’s trade and current account surpluses rise as exports soar

The German export boom continued apace in July, with their value up 6.3% on July 2014.  For the period January to July, exports rose 6.9% year on year, whilst imports rose by 3.4%. This gives further evidence of Germany’s rapidly rising overall trade and current account surpluses, with a major impact on its trading partners within the eurozone and elsewhere.

UK GDP quarterly rise of 0.3% confirmed - but GDP per person up just 0.1%

There were no big surprises in today’s Office for National Statistics’ 2nd estimate of UK GDP for the first quarter of 2015 – except on the part of those who expected it to be higher than the first. The economy “grew” 0.3% from Q4 2014, and compared to Q1 2014 it was 2.4% up (unchanged).  Services’ output continued to rise while production was stagnant and construction output fell. The trade gap widened, and this had a negative impact on GDP.

UK production in 1st Quarter: up just 0.7% year on year

The most recent UK production statistics were published today by ONS.  They show that production as a whole (which includes manufacturing, mining and quarrying – mainly North Sea oil and gas – and the gas, electricity, water, waste etc. production utilities) increased by just 0.1% between Q4 of 2014 and Q1 of 2015. 

Looking at March 2015, production is estimated to have increased by 0.7% on March 2014, with manufacturing up over the year by 1.1%.  This is well below the estimated increase in GDP overall, which means that the UK economy is increasingly reliant on the service sectors for its momentum – and the much-promised rebalancing of the economy (including the “march of the makers”) is continuing to recede.

Europe’s trade in goods – smaller EU deficit, growing EZ surplus

Eurostat today published its first estimate of the February 2015 trade in goods position for the EU as a whole, and for the 19-country Eurozone.  In February compared with January 2015, euro area seasonally adjusted exports increased by 2.8%, while imports increased by 2.6%. The seasonally adjusted balance was +€22.0 bn, an increase compared with January (+€21.2 bn).  Not seasonally adjusted, the balance was €20.3 bn.   The Eurozone's economy seems to be significantly based on maintaining large trade surpluses, which require equal ongoing trade deficits from elsewhere in the rest of the EU and world.

Signs of very marginal improvements in Greece - but unemployment still over 25%

The headline news from the latest Labour Force Survey results is that Greece’s unemployment has fallen just a little in January 2015 – it is now 25.7% compared to 27.2% in January 2014, and to 25.9% in December 2014.  The annual fall in unemployed is around 87,000, but note that the total number of unemployed is still a massive 3.53 million.

The employment situation has improved even less compared to a year ago – with a gain of just 37,000 finding employment.

EU Industrial Producer Prices up in February - ups and downs

According to Eurostat (1), Industrial Producer Prices in February 2015 rose 0.5% from January in the Eurozone, and by 0.6% in the EU as a whole.  This is the first monthly rise since September. But year on year, they fell by 2.8% in the Eurozone and 3.4% for the EU – the largest recent year on year falls bar January.

What is striking is that the monthly increase is due mainly to a small nudge-up of energy prices – whilst total industry prices excluding energy continued to fall both monthly (-0.1% in Eurozone and EU) and year on year, -0.7% for the Eurozone, -0.8% for the whole EU

Q3 - UK capital investment (GFCF) up, business investment down

In Q3 2014, GFCF is estimated by ONS to have increased by £0.7 billion (1.0%) since the previous quarter, to £73.2 billion. It is up 7.1% compared with Q3 2013. Most of the increase came from increased investment in other buildings and structures.

Also from ONS, in Q3 2014, business investment decreased by some £0.3 billion from Q2, but it is up 6.3% compared to Q3 2013.  The total of business investment was £44.6 billion – this is £2.6 billion higher than its pre-downturn peak in Q2 2008.  The main falls were in software and mineral exploration.

Government investment, which had fallen for each of the last 4 years, saw a 5.3% rise on the same Q in 2013.  However, it is still 16% down on the peak government investment Quarter 4 in 2009.