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Economy in Brief

UK Output: Suddenly on the Mend
by Robert Brusca April 9, 2008

The sequential growth rates for January tell the story compared to their February counterparts: In January year/eayr output growth was 0.7% sliding to an annual rate of 0.6% over six months and to a pace of 0.4% over three months. UK MFG was slow and slowing. Now in February year-over-year growth is 2%, six-month growth still slows, but to 1%, and three-month growth is a solid rebound at 2.7%. Consumer durables are a big reason for the shift with a three-month growth rate up to 19.7% saar. Intermediate goods output is still declining over three months but capital goods output is up a strong 4.8% after being flat over three months in January. The detail shows that much of that rebound is in the volatile auto sector.

Still there is a clear sign of progress. The chart on the left demonstrates that a falling growth pattern has been arrested and features a fledgling upturn of some strength. It may be that the weakness in the pound sterling has something to do with this re-vitalization. Domestic UK spending patterns have not been so strong and confidence continues to slip. If the recovery in output is for real, and not just an artifact of monthly volatility, it is probably the exchange rate at work.

UK IP and MFG
Saar except m/m Mo/Mo Feb
08
Jan
08
Feb
08
Jan
08
Feb
08
Jan
08
 
UK MFG Feb
08
Jan
08
Dec
07
3Mo 3-Mo 6mo 6mo 12mo 12mo Q1
Date
MFG 0.4% 0.5% -0.2% 2.7% 0.4% 1.0% 0.6% 2.0% 0.7% 2.3%
Consumer
  Durables 2.3% -0.3% 2.5% 19.7% 3.1% -1.8% -5.0% 2.3% -1.1% 10.3%
  Nondurables 0.3% 0.3% -0.5% 0.4% -1.2% -0.2% -0.4% 0.5% -1.3% 0.4%
Intermediate -0.1% -0.4% -0.1% -2.5% -3.7% -0.8% -1.1% 0.4% 0.6% -3.3%
Capital 0.5% 0.1% 0.5% 4.8% 0.0% 3.5% 2.4% 3.6% 2.2% 2.5%
Memo: Detail 1Mo% 1Mo% 1Mo% 3Mo 3Mo 6mo 6mo 12mo 12mo Q-4
Date
Food Drink & Tobacco 0.6% 0.4% -0.5% 2.0% 0.4% 0.8% -0.8% 0.1% -1.8% 2.1%
Textile & Leather 1.3% -0.2% 0.3% 5.7% -7.1% -6.3% -6.2% 2.6% 0.3% -0.1%
Motor Vehicles & Trailer 2.4% 1.7% 1.7% 19.9% -3.0% 2.3% 2.3% 2.3% 5.6% 5.6%
Mining and Quarrying -1.2% -4.4% 1.3% -16.1% -20.7% -10.8% -11.2% -6.4% -3.6% -21.7%
Electricity, Gas & Water 0.7% -1.7% 0.8% -0.8% -5.0% 6.3% 3.1% 2.8% 0.9% -4.4%
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