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Economy in Brief

UK IP Trends Turn Lower
by Robert Brusca July 7, 2008

UK IP is now lower in two of the past three months. The three-month moving average has turned negative. Weakness in the industrial economy is now spreading and deepening. The consumer sector is leading the weakness. Consumer durable goods output is down in seven of the last eight months on a Yr/Yr basis. Consumer nondurables are down yr/yr in six of the last eight months but also in eight of the last 10 months (Yr/Yr basis as well). Intermediate goods output is off in two of the past three-months Yr/Yr. While capital goods output has fallen in May on a Yr/Yr basis for the first time since December 2005.

The declines in output the current quarter (2008-Q2) are severe. For MFG the drop is -1.8% at an annual rate. Consumer durable goods output is off at a 9.4% pace in the quarter. Nondurables output is off at a 2.9% pace. Intermediate goods output is falling at a 3.3% pace. Capital goods output is rising at a 2.0% pace.

The UK is showing both inflation pressures and economic weakness. The weakness in the UK is more severe than what Europe has showed, at least as a whole. Still, the UK like Europe continues to show capital goods as the strongest sector. In this month’s report that strength is clearly on the decline.

UK IP and MFG
Saar except m/m Mo/Mo May
08
Apr
08
May
08
Apr
08
May
08
Apr
08
 
UK MFG May
08
Apr
08
Mar
08
3Mo 3Mo 6mo 6mo 12mo 12mo Q1
Date
MFG -0.6% 0.1% -0.5% -3.8% 0.0% -0.8% 0.2% -0.8% 0.0% -1.8%
Consumer                    
Consumer Durables -0.1% -0.6% -2.9% -13.5% -7.4% 1.6% -1.2% -1.2% -3.5% -9.4%
Consumer-Nondurables -0.8% -0.1% -0.4% -5.1% 0.0% -2.0% 0.2% -1.7% -0.4% -2.9%
Intermediate -1.0% 0.1% -0.5% -5.4% -1.3% -3.8% -2.7% -2.3% 0.3% -3.3%
Capital -0.7% 0.7% 0.0% 0.0% 3.7% 1.1% 0.7% -0.1% 0.8% 2.0%
Memo: Detail 1Mo% 1Mo% 1Mo% 3Mo 3Mo 6mo 6mo 12mo 12mo Q4
Date
Food Drink & tobacco -0.3% -0.4% -0.4% -4.3% -0.4% -1.0% 0.4% -1.4% -1.7% -2.8%
Textile & Leather -0.3% 0.1% 0.3% 0.5% 6.5% 4.4% 1.8% 0.6% 3.6% 2.6%
Motor Vehicles & trailer -3.7% 1.9% -1.0% -11.0% 11.4% 2.9% 5.1% 5.1% 9.4% -0.3%
Mining and Quarry 0.7% -0.1% 0.3% 3.4% -3.3% -5.8% -12.2% -7.0% -5.7% 0.3%
Electricity, Gas & Water -5.2% 1.3% -1.0% -18.2% 3.7% -10.3% -1.2% -3.7% 7.3% -8.2%
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