Intelligentguess

Situation

• On a monthly basis production had no growth  ( grew by 0.4% in Arp’07)
• On a yearly basis production has grown by 1.60 % p.a ( no change from Apr’07)

Background

New orders have had a bit of growth in Apr’07 ( first time since Sept’06). This could puush production up towards Sept’07

Conclusion ( click on image for a better visual)

• Production could range between 1.90% and 4.2% growth towards Sept’07
• Would expect Production to contract towards -5.0% p.a towards end of 2007 early 2008.

Related links

• USA - Production grows in Mar’07 at the slowest pace since Sept’05
• Europe - Production in Apr’07
• UK - Production remains down in Apr’07
• Japan - Production grows at a declining rate in Apr’07
• India - IIP continues to grow in Apr’07

• USA - New orders grow for the first time since Sept’06
• Europe - New Orders grow in Mar’07
• Japan - Orders grow marginally in Apr’07
• UK - New Orders decline in Apr’07

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Situation

• On a monthly basis prices rose by 0.43 % (0.32 % in Mar’07)
• On an annual basis prices rose by  2.41 % p.a ( 2.82 % p.a in Mar’07)

Background

1. The annual inflation is at its lowest levels since July 2004 ( 2.41 % p.a)
2. The European Commercial Bank (ECB) had raised its interest rates from 3.25% to 3.75%,  in Dec’06 (25 basis ponts), and in Marc’07 (25 basis points).
3. The ECB in its meeting on Jun’07 further raised the bank rate by 0.25 bais points to 4.00%.
4. The European Commercial bank ( ECB) aims at inflation ( CPI ) rates of below, but close to, 2% over the medium term.
5. European GDP has been expanding in Q1 2007

Conclusion (click on image for a better visual)

• The recent hike in rates would encourage the PPI to move towards the  2.00% p.a area ( ECB target)
• The strong drop in PPI could also lead to CPI ( specifically Core CPI) dropping. If this does happen - the ECB could take a breather on rate hikes.

Related links

• Europe - Producer Prices : Prices in Mar’07 rise at the lowest pace since Jul’04
• USA - Producers prices remain high in Apr ‘07
• UK - PPI Producer prices drop in Apr’07
• Japan - Producer prices rise in Apr’07

• Euro area - Core inflation ( CPI ) growth at its highest since Jun’04
• USA - Inflation rate (CPI) drops marginally in Apr’07
• UK Inflation (CPI) drops in Apr’07
• Japan - Inflation indices ( CPI ) deflate in Mar’07 
• India - marginal drop in inflation ( CPI )

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Situation

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Background

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Conclusion (click on image for a better visual) 

• Orders can be expected to range between contraction of -5.0% p.a to a 7.00% p.a growth towards Jul-Sep’07
• A -5.0% p.a to a -14.00% p.a contraction in orders looks likely from Sept 2007 towards Mid 2008
• Production can be expected to remain down in May’07 ( and with 2 months production down , GDP cannot be expected to have strong growth in Q2 2007)

Related links

• USA - New orders grow for the first time since Sept’06
• Europe - New Orders grow in Mar’07
• Japan - Orders grow marginally in Apr’07

• Europe - Production in Apr’07
• UK - Production remains down in Apr’07
• Japan - Production grows at a declining rate in Apr’07
• USA - Production grows in Mar’07 at the slowest pace since Sept’05
• India - IIP continues to grow in Apr’07

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Goods as a % of GDP

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Goods and Services as a % of GDP

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Balance of payments ( BOP) as a % of GDP

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UK - Trade as a % of GDP (click on image for a larger visual)

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USA - Trade as a % of GDP (click on image for a larger visual)

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