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ECONOMIC DATA THIS WEEK

European Industrial Production, June 2015:  Data released by Eurostat shows that total industrial production in the EU as a whole was -0.2% lower than in May 2015, but was +1.7% higher than a year earlier (June 2014).  For the euro-zone, the changes were -0.4% and +1.2% respectively.

Output of Capital Goods in the EU fell by -1.2% compared to May, but was +2.4% higher than a year ago, while within the euro-zone, output of the sector fell by -1.8% on the previous month but was +1.7% higher than in June 2014.

Looking back over 12 months for the 23 Member States who have released their June figures, total industrial production increased in 18 countries and fell in only 5;  the strongest growth was recorded in Ireland 9+27.6%) and Denmark (+7.6%), while the most significant reductions were in Greece (-4.6%) and Estonia (-3.4%).

You can get the Eurostat News Release from their web-site at http://ec.europa.eu/eurostat or on request from MTA.

Bank of England Agents’ Summary of Business Conditions, August 2015:  The Bank of England Agents’ report this month shows that manufacturing output growth for the UK market had remained positive, although the pace was slower than we had seen at the end of 2014.  Contacts reported relatively strong demand in automotive supply chains and a period of destocking in Aerospace supply chains (associated with easing of demand growth) appears to have been completed.  However, demand in other sectors, including capital goods as a whole, reported output as flat and demand for equipment related to the oil & gas sector has remained weak.

Manufacturing export growth remains modest;  the strength of Sterling has mainly impacted on margins rather than volumes so far, but export volumes to Europe are expected to sow more markedly.  Contacts were more optimistic about US dollar denominated markets and especially for sectors such as Aerospace, although demand from China and Russia continues to moderate.  Capacity utilisation remained slightly below normal in manufacturing as a whole, but was elevated in the Automotive and Aerospace supply chains.

This month there was a special set of questions about investment intentions which is reported in the summary.  Overall, the survey indicated broad-based growth for the coming year, but the weakest expectations were in the manufacturing sector, although they were still positive.  The main driver of investment growth was to achieve efficiency or productivity gains, followed by demand for products/services and major maintenance or replacement of equipment.  The main source of finance for the investment was internally generated funds;  medium sized firms planned to use bank borrowing more than either small or large firms.

You can get the Bank of England Agents’ summary report from their web-site at http://www.bankofengland.co.uk/publications/Documents/agentssummary/2015/Aug.pdf or on request from MTA.

UK Trade in Goods, 2nd Quarter 2015:  Data for the Office for National Statistics (ONS) shows that the UK’s trade deficit for goods was £27.4 billion, a narrowing of £3 billion compared to the 1st quarter of the year as a result of an increase in exports, while imports were almost unchanged.  The growth in exports was attributed to an increase in shipments of chemicals, fuels and machinery & transport equipment.  For imports, while there was a rise in arrivals of oil and chemicals, there was also a sharp fall imports of  consumer goods other than cars and intermediate goods.

Geographically, our trade deficit in goods with the EU widened slightly with imports increasing by a little more than exports, so it was the rest of the world where the narrowing in the deficit came;  this was as a result of increases in exports to the USA, China and Saudi Arabia, while imports from China fell, although there was an increase in imports from South Korea and Switzerland.

You can download the ONS Statistical Bulletin, which has more details on this trade at a general commodity level, from their web-site at www.ons.gov.uk or on request from MTA.

USMTO and US CTMR, June 2015:  The US Manufacturing Technology Orders (USMTO) programme tracks orders received in the US market, irrespective of origin;  the numbers in this report are based on the totals of actual data reported by companies participating in the USMTO programme.  In the 1st half of the year, orders are -8.7% lower than in the same period last year (January to June 2014).

The regional breakdown is not complete because of confidentiality issues in a couple of regions, but it points to orders falling in 4 regions, the most significant which is a reduction of -50.7% in the South Central region;  the other two regions - the North-East and North Central West areas - appear to be expanding.

The US Cutting Tool Market Report (CTMR) tracks sales of cutting tools in the US and the latest figures show that sales in June were +9% higher than in May, but were -1% down on June 2014;  the year to date total is not published and there is no regional breakdown of this series.

You can download the News Releases on these two reports from the AMT web-site at www.amtonline.org or request them from MTA (we have a small mailing list for these surveys and can send them to you each month as they are released).