Intelligentguess

 Overall production output increased by 0.8% in Q4 2006 ( as compared to the same period last year)  & decreased by 0.2 per cent as compared to Q3 2006.

While manufacturing output remained unchanged, there were decreases of 1.7 per cent in energy supply sector output and 0.6 per cent in mining and quarrying sector output. The latter was due to a decrease in gas extraction output. (Mild average temperatures throughout quarter four have reduced the demand for gas)

The overall Index of Production  increased by 0.5% in December 2006( as compared to the same period last yr) &  decreased by 0.1 per cent between November and December 2006

For 2006 as a whole, production industries output was 0.1 per cent lower than in 2005.

Thanks to the current strong   vis the    there would be a tendency to import - rather than buy. As such one can continue to expect mild growth rates in the production index

This again has a effect on the GDP growth rate ( Q4 2006 was at 3% )

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The UK’s deficit on trade worsened to a 7 month high. The deficit for December 2006 is at £4.9 billion , compared to a deficit of £4.5 billion in November 2006.
The surplus on trade in services was £2.2 billion in December, compared with a surplus of £2.4 billion in November.

The deficit on trade in goods in December was £7.1 billion, compared with a deficit of £6.9 billion in November . Exports fell by £0.2 billion but imports were little changed.

Excluding oil and erratic items, the volume of exports rose by one per cent between November and December and the volume of imports rose by three per cent. (the surge in deficit seems to have been caused by a small fall in exports combined with a larger rise in imports )

For the year as a whole, UK’s deficit on goods and services rose to £55.8 billion – compared with a deficit of £44.6 billion in the previous year.

Interestingly the ₤ had strengthened to record highs against the ¥ € $ currencies from October to December 2006. The ₤ is still at pretty strong levels

The effects of the strong ₤ could weaken overseas activity further and could start having an effect on the Q1 2007 - GDP growth rate ( Q4 2006 was at 3% ).

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The total value of machinery orders received by 280 manufacturers operating in Japan decreased by 15.0% in December from the previous month on a seasonally adjusted basis.

As compared to Dec 2005 the decrease was at 3%. ( as compared to the United States which grew by 1.3% for the same period)

In October-December period it rose by 3.8% compared with the previous quarter.

In the Janauary-March 2007 period the total amount of machinery orders was forecasted to decrease by 4.0%.

In 2006 Year the total amount of machinery orders it rose by 11.1%. Also private-sector orders, excluding volatile ones, increased by 4.0%.

The above would have an impact on the already weak Japanese GDP growth as well as on worldwide metal commodity prices.

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