Inteligencia y Seguridad Frente Externo En Profundidad Economia y Finanzas Transparencia
  En Parrilla Medio Ambiente Sociedad High Tech Contacto
Economia y Finanzas  
 
28/03/2009 | UK - Preview of Main U.K. Economic Indicators for Week Beginning 30 March

Howard Archer

Forthcoming data and survey evidence are likely to be extremely weak, heightening fears that the U.K. economy will have contracted at a similar rate in the first quarter of 2009 to the 1.6% quarter-on-quarter drop in GDP suffered in the fourth quarter of 2008.

 

The March manufacturing purchasing managers' index (PMI—out on Wednesday) is expected to show that the sector continues to be battered by slumping domestic and foreign demand, and intensified competition. The already released CBI industrial trends survey for March was woeful, showing order books sinking to a 17-year low and production expectations at a 28-year low. Specifically, we forecast the manufacturing PMI to have fallen to a record low of 34.0 in March from 34.7 in February and 35.8 in January (the survey started in 1998 and the current all-time low of 34.5 occurred in November 2008). It would also denote an 11th successive month of contracting manufacturing activity (denoted by a reading below 50.0). Meanwhile, we expect the output prices sub-index to indicate that prices fell as sharply contracting demand and activity weighed down heavily on manufacturers' pricing power.

The construction purchasing managers index (out on Thursday) is forecast to have essentially stabilized in March, after plunging to a record low in February. We expect the PMI to have edged up to 28.0 in March after dropping to 27.8 in February from 34.5 in January (the series started in 1997). This would still be the second-lowest level on record and massively below the 50.0 level that indicates unchanged activity. House building is in particularly bad shape, but the weakness in construction activity is widespread. With the housing market and commercial property sectors remaining under serious downward pressure, it is hard seeing the travails of the construction sector easing significantly any time soon, even though the sector will be helped to a limited extent by the government bringing forward some public construction activity and infrastructure spending as part of its fiscal stimulus package.

The service sector purchasing managers' index (out Friday) is forecast to show that the dominant sector continues to contract sharply. We expect the business activity index to have slipped back to 43.0 in March after improving modestly to 43.2 in February, from a record low of 40.1 last November. This would indicate an 11th month of contracting activity (below 50.0). The financial crisis and credit crunch is obviously hitting the business services and finance sector hard, while the sharp housing market slowdown and reduced consumer spending is also weighing down heavily on services activity. Meanwhile, the prices charged index is likely to show a further fall in prices charged in March, as service companies' pricing power is diluted by sharply contracting activity and new business.

Further evidence of the service sector's ongoing marked weakness is likely to come from the index of services (out Tuesday) showing that output contracted 1.0% in the three months to January compared to the three months to October. This would be deeper than the 0.8% three-month/three-month drop seen in December.

Latest data and survey evidence suggest that consumers are increasingly reining in their spending. The Gfk/NOP consumer confidence index for March (out Tuesday) is likely to show sentiment remaining mired at very depressed levels in the face of soaring unemployment and deep concerns over the economic situation and outlook. Meanwhile, people's perception of whether it is a good time to make major purchases is highly likely to have fallen in March after rising early in 2009 due to the clearance sales. Specifically, we forecast the GfK/NOP consumer confidence index (which is carried out on behalf of the European Commission) to have edged back to -36 in March after rising to -35 in February from a six-month low of -37 in January. This would be one of the lowest levels in the series 34-year history (the record low was -39 in July 2008) and massively below the long-term average of -7.

The Bank of England is expected to reveal on Monday that mortgage approvals for house purchases edged up to 33,000 in February from 31,000 in both January and December and a record low of 27,000 in November. Nevertheless, this would still be one of the lowest levels since comparable records began in 1993. It would also be less than one-half of the 68,000 level seen in February 2008, when mortgage approvals were already well down from 114,000 in mid-2007. In addition, the Bank of England is forecast to report that net mortgage lending was limited to just £1.0 billion in February. While this would be up from £690 million in January, it would be below the £1.4 billion average for the previous six months and down massively from £6.9 billion in February 2008.

Meanwhile, the Halifax lender is forecast to report during the week that house prices fell 1.5% month-on-month in March. House prices fell 2.3% in February after surprisingly rising 2.0% in January on the Halifax's Measure. Consequently, house prices are seen falling 17.2% year-on-year in the three months to March.

Although latest survey evidence indicates that buyer enquiries are now picking up significantly as people are attracted by lower house prices and the Bank of England slashing interest rates, we are sceptical that this will lead to a mark up in actual sales anytime soon, and we expect house prices to continue to fall for some considerable time to come. Many people are likely to be looking at houses pretty casually and will probably be very cautious about committing to buying a house in the current economic environment. Consequently, only a major bargain is likely to tempt them into actually buying a house. With several powerful negative factors still weighing down heavily on the housing market, we expect house prices to fall by a further 15% overall in 2009 and 5% in the first half of 2010 on the Halifax measure before stabilizing. This would take them some 35% below their autumn 2007 peak levels.

The Bank of England is also forecast to report on Monday that net consumer credit amounted to just £0.3 billion in February, which would be similar to the January and December outturns. Consumer borrowing is likely to be limited over the coming months by ongoing very tight lending conditions, as well as many people increasingly looking to rein in their borrowing. However, higher distressed borrowing seems certain over the coming months (if people can get it), as an increasing number of households struggle in the face of soaring unemployment as well as deepening pressures on their finances.

Bank of England data on Wednesday are expected to show that housing market withdrawal amounted to -£9.0 billion in the fourth quarter of 2008. This would mark a third successive net injection of housing equity following £5.7 billion in the third quarter and £2.0 billion in the second. These are the first net housing equity injections since the second quarter of 1998. Sustained sharply falling house prices have made housing equity withdrawal increasingly unattractive, while very tight credit conditions have made it more difficult to carry out the process, as well as to take out new mortgages. In addition, ever lower savings rates have made it increasingly more attractive for many people to use any spare funds that they have to reduce their mortgages.

 

30 Mar—Bank of England Consumer Credit, February (GBP/Billion): +0.3
30 Mar—Bank of England Net Lending Secured on Dwellings, February (GBP/Billion): +1.0
30 Mar—Bank of England Number of Loan Approvals for House Purchase, February (000s): 33
31 Mar—Index of Services, January (3-month/3-month): -1.0%
31 Mar—GfK Consumer Confidence Index, March: -36
1 Apr—Manufacturing Purchasing Managers Index, March: 34.0
1 Apr —Housing Equity Withdrawal, Q4 2008 (GBP/Billion): -9.0
2 Apr—Construction Purchasing Managers Index, March: 28.0
3 Apr—Service Sector Purchasing Managers Index, March: 43.0
During Week—Halifax House Prices, March (Month-on-Month): -1.5%
During Week —Halifax House Prices, March (Year-on-Year): -17.2%

Global Insight (Reino Unido)

 


Otras Notas Relacionadas... ( Records 1 to 10 of 862 )
fecha titulo
01/07/2013 El socio 28
17/05/2013 Hollande propone un gobierno económico para la zona euro
16/05/2013 La crisis europea
16/05/2013 The New Sick Man of Europe: the European Union
03/05/2013 Union Europea - Cambio insuficiente
11/04/2013 Bruselas advierte
02/04/2013 El euro sobrevive, pero ¿qué ha sido de los europeos?
30/03/2013 The Bankrupcty of EU's No-Default Policy
27/03/2013 Don’t blame Germany for Europe’s woes
19/03/2013 Nace en Alemania un nuevo partido contrario al euro


Otras Notas del Autor
fecha
Título
24/11/2012|
09/09/2012|
29/07/2012|
29/07/2012|
29/07/2012|
29/07/2012|
22/07/2012|
14/07/2012|
08/07/2012|
01/07/2012|
24/06/2012|
10/06/2012|
27/05/2012|
20/05/2012|
13/05/2012|
06/05/2012|
29/04/2012|
21/04/2012|
24/03/2012|
18/03/2012|
18/03/2012|
11/03/2012|
11/03/2012|
04/03/2012|
04/03/2012|
26/02/2012|
26/02/2012|
26/02/2012|
23/10/2011|
15/10/2011|
02/10/2011|
25/09/2011|
31/07/2011|
17/07/2011|
17/07/2011|
10/07/2011|
10/07/2011|
03/07/2011|
03/07/2011|
19/06/2011|
19/06/2011|
05/06/2011|
05/06/2011|
29/05/2011|
29/05/2011|
22/05/2011|
22/05/2011|
15/05/2011|
15/05/2011|
08/05/2011|
08/05/2011|
11/04/2011|
26/03/2011|
20/03/2011|
26/02/2011|
19/02/2011|
12/02/2011|
29/01/2011|
22/01/2011|
15/01/2011|
01/01/2011|
25/12/2010|
18/12/2010|
11/12/2010|
20/11/2010|
14/11/2010|
05/11/2010|
31/10/2010|
23/10/2010|
09/10/2010|
03/10/2010|
18/09/2010|
11/09/2010|
11/09/2010|
11/09/2010|
04/09/2010|
04/09/2010|
06/08/2010|
30/07/2010|
24/07/2010|
17/07/2010|
10/07/2010|
03/07/2010|
20/06/2010|
19/06/2010|
13/06/2010|
05/06/2010|
29/05/2010|
22/05/2010|
16/05/2010|
01/05/2010|
25/04/2010|
10/04/2010|
03/04/2010|
28/03/2010|
12/02/2010|
05/02/2010|
23/01/2010|
15/01/2010|
08/01/2010|
19/12/2009|
11/12/2009|
11/12/2009|
05/12/2009|
05/12/2009|
28/11/2009|
28/11/2009|
21/11/2009|
21/11/2009|
13/11/2009|
13/11/2009|
07/11/2009|
31/10/2009|
17/10/2009|
09/10/2009|
03/10/2009|
19/09/2009|
12/09/2009|
05/09/2009|
07/08/2009|
07/08/2009|
01/08/2009|
01/08/2009|
19/07/2009|
19/07/2009|
15/03/2009|
15/03/2009|
28/02/2009|
28/02/2009|
18/01/2009|
02/01/2009|
24/09/2008|
24/09/2008|
06/04/2008|
06/04/2006|

ver + notas
 
Center for the Study of the Presidency
Freedom House