The improvement in the surveys continues to provide a realistic guide to Chia’s improving fortunes with the December real activity data corroborating this picture. The strong recovery in industrial production is most noticeable, with y/y rate jumping to 6.9%, the highest since March
Tags: Industrial Production
UK economy continued to slow in November. According to the monthly GDP estimate the economy shrank by -0.3% m/m. Although the smoothed 3/3m rate still showed a +0.1% rise, this was the slowest pace since fears of a hard Brexit dominated thinking back in the summer and on a y/y basis the +0.6% recorded was the weakest since back in the days of the Eurozone debt crisis (June 2012 to be exact).
Germany has just reported much-improved industrial production numbers for November. In volume terms they jumped 1.1% mom on a seasonally-adjusted basis, better than consensus expectations for a 0.8% rebound. So the downturn is over? Don’t bet on it.
October retail sales registered a further deceleration in growth. The control group is still showing a decent rate of y/y expansion but other groups momentum has clearly reversed from the summer pick up. The industrial production report was bleaker reading.
While China’s 3Q GDP number was a little lower than expectations at 6.0% y/y the monthly production and activity series for September all improved. Retail sales growth picked up to 7.8% y/y from 7.5% while industrial activity rebounded to 5.8% y/y from 4.4% in August. Investment was perhaps the one area of disappointment, growth slowing to 5.4% y/y despite a further modest pick up on the State Owned side.
US industrial activity disappointed again in September, with output down -0.4% m/m. Although there was some better news in August, with production from then revised upward a little bit, the underlying trend remains weak. Manufacturing is still the focal point with the declines we’ve seen in non-durables spreading to durables this month.
April turned out to be another poor month for German industry with the decline in overall industrial production fairly modest compared to the drop on the manufacturing side, where output dropped 2.5% on the month leaving output down 3.4% y/y.
Soft industrial production number which reflects tepid manufacturing activity where growth is now running at its lowest rate is two years. This matches the deterioration we’ve seen on the orders side of the Federal Reserve bank surveys and fits with the upward pressure seen on the inventory side.
Trade and output data surprising to the upside, boosted by what looks to be activity as firms seek to get ahead of the curve pending the previously expected March 29 Brexit data – which the March PMIs also showed amid a record increase in inventories (and not just compared to UK history, but globally).