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Economic Data this Week

UK Manufacturing Output, August 2016:  The Office for National Statistics (ONS) released the data for the UK manufacturing sector at the end of last week;  in the latest 3 months (June, July and August 2016), total manufacturing output was -0.4% lower than in the previous 3 months (March, April and May 2016), but was +0.6% higher than  year earlier (June, July and August 2015).  In the rest of this note, we will use the same comparisons.

The Capital Goods sub-sector has done better with output growth of +0.7% and +2.7% respectively, although the short-term trend is likely to reverse next month as the June figure was particularly strong.

Looking at the separate industries, there is continuing evidence that growth in both the Automotive and Aerospace sectors may be moderating, but it must be noted that the overall level of activity in these industries remains very high;  output of the Automotive industry showed growth of +0.3% and +6.7% on the two comparisons, while growth in the Aerospace industry was +1.2% and +5.1% respectively.

In contrast to Capital Goods overall, the Machinery industry had a poor June, but although it has shown signs of recovery since, output is still down by -0.7% in the latest 3 months, but is +0.8% higher than a year ago.  The Metal Products industry continues to bump along with output falling by -0.3% and -0.5% respectively.

You can download the ONS Statistical Bulletin from their web-site at or request it from MTA;  we also have an analysis of the key industries which is available to members - please contact Geoff Noon ( if you would like these charts.

European Industrial Production, August 2016:  Eurostat has also released its figures for Industrial output in August - note that this includes activity such as extraction/mining and utilities, as well as manufacturing.  Total industrial production in the euro-zone was +1.6% higher than in July and it expanded by +1.4% for the EU28 as a whole;  for both areas, total industrial output was +1.8% higher than a year earlier.

As in the UK, the Capital Goods sub-sector outperformed the whole industrial sector with output in the Euro-zone +3.5% higher than in July and +2.6% up on the level of a year earlier, while for the EU28 as a whole, the trends in output for the capital goods industries were +3.8% and +3.3% respectively.

Looking at the 12-month trends, among the 23 Member States for whom the data is published, total industrial production increased in 16 and fell in 7.  The fastest growth was in the Czech Republic (+7.7%) and Slovenia (+5.9%), while the largest reductions were in Ireland (-8.5%) and Sweden (-6.2%) - the latter has seen a significant reduction in 3 of the last 4 months.

You can download the Eurostat Press Release from their web-site at or request it from MTA.

Profitability of UK Companies, 2nd Quarter 2016:  The ONS has also released data which shows that the net rate of return for manufacturing companies was 13.6%, higher than both the 12.9% registered for the 1st period of the year and the 11.4% set in the 2nd quarter of 2015.  This is the highest level since the 2nd quarter of 2014 and the second highest this century.

The net rate of return is the net operating surplus (gross less capital consumed) divided by net capital employed (the “like for like” replacement cost).  You can download the ONS Statistical Bulletin from their web-site at or request it from MTA.

USMTO August 2016:  The US Manufacturing Technology Orders (USMTO) programme tracks orders received in the US market, irrespective of origin.  Order intake in the first eight months of 2016 are -12.8% lower than the equivalent period of 2015.

AMT report that this is the first time since March 2015 when all six regions have seen a month-on-month increase in orders and even more encouraging that it comes in a holiday month and just ahead of IMTS which will undoubtedly boost the September figures.  Looking at the year-to-date trends, only the South-East region (+18.3%) is running ahead of the January to August 2015 period;  of the other five regions, the reduction in orders ranges from -7.1% in the West up to -32.1% in the South-Central area.

You can download the USMTO News Release from the AMT web-site at or request it from MTA.  There is short video explaining the latest numbers on the AMT web-site for those who are interested.

Euro-zone Business Investment and Profitability, 2nd Quarter 2016:  Data published by Eurostat shows that the business investment rate in the Euro-zone was 22.2%, slightly up on the 22.1% recorded in the previous quarter and the 22.0% from a year earlier.  The business profit share in the same period was 40.6%;  this is also slightly up on the previous quarter (40.5%) and is the same level as in the 2nd quarter of 2015.

The (gross) business investment rate is defined as gross fixed capital formation divided by gross value added.  The profit share is gross operating surpluses divided by gross value added.  Again, you can download the Eurostat Press Release from their web-site at or request it from MTA.