Intelligentguess

Situation

• On a monthly basis production contracted by -0.45%  ( grew by 2.85% in Mar’07)
• On a yearly basis production has grown by 9.03% p.a ( grew by 10.17 % p.a in Mar’07)

Background

• Production has been on a downward growth trend since May’06 ( 5.64% p.a in May’06 and 3.06% p.a now)
• The ECB raised interest rates to 4.00% on June 6 2007

Conclusion  (click on image for a better visual)

• Orders likely to drop initially towards 4.5.% p.a and then retain a range between 4.50% p.a - 9.50% p.a towards Sept’07
• Growth then likely to drop to a 0% p.a after Sept ‘07 towards Mid ‘08

Related links

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

• Europe - Production in Apr’07
• USA - Production in May’07 grows at its slowest pace since Sept’05
• 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

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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

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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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Situation

• On a monthly basis production contracted by -0.83%  ( grew by 0.54% in Mar’07)
• On a yearly basis production has grown by 3.06 % p.a ( grew by 3.95 % p.a in Mar’07)

Background

• Production has been on a downward trend since May’06 ( 5.64% p.a)
• The ECB raised interest rates to 4.00% on June 6 2007

Conclusion ( click on image for a better visual) 

• Production looks like dropping to a maximum of a 2.4% p.a area, and then rising towards 5% p.a towards Sept ‘07.
• Post Sept’07 growth looks like dropping to a 0% p.a towards mid ‘08

Related links

• Euro area - Production (IIP) grows in Feb’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

• 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

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Situation

• On a monthly basis production contracted by -11.3%  ( grew by 14.6 % in Mar’07)
• On a yearly basis production has grown by  13.60 % p.a ( grew by 14.5% p.a in Mar’07)

Conclusion ( click on image for a better visual)

• On a 3 month rolling average basis the IIP looks like dropping towards 10.5% p.a towards Jun’07.
• IIP could then drop further to 9% p.a towards end ‘07

Note : On the basis of actual interaction with few of the major automobile, textile and garment manufacturers (on the basis of the day to day work  I am involved in) production was already down over the previous quarter, and is expected to remain this way until Sept-Oct’07.

• Amongst Automobile manufacturers the drop is towards 10% - 15%
• Amongst the larger textile manufacturers the drop is about 15%
• Amongst the garment manufacturers , production is down by 30% ( essentially dollar sales have stopped)

As such seeing a 13.60% p.a growth in Apr’07 is  pretty surprising 

 

Related links

• India - Production grows in Mar’07
• UK - Production remains down in Apr’07
• Japan - Production grows at a declining rate in Apr’07
• Euro area - Production (IIP) grows in Feb’07
• USA - Production grows in Mar’07 at the slowest pace since Sept’05

• 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

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Situation

• On a monthly basis production remained flat  ( contracted by -0.20 %  in Apr’07)
• On a yearly basis production has grown by  0.40 % p.a ( contracted by -0.40  % p.a in Apr’07)

Background

• Bank of England has hiked the interest rates for the  4th  time since Aug’06 to 5.50%.
• GDP growth rate for Q1 2007 is at 2.86% p.a ( 2.90% p.a in Q4 2006)

• UK - Production - annual growth rate slips to a negative in Mar’07
• Japan - Production grows at a declining rate in Apr’07
• Euro area - Production (IIP) grows in Feb’07
• USA - Production grows in Mar’07 at the slowest pace since Sept’05
• India - Production grows in Mar’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

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Situation

• On a monthly basis production has grown by 15.96%  ( contracted by -15.73 %  in Mar’07)
• On a yearly basis production has grown by  2.98 % p.a ( contracted by -16.46  % p.a in Mar’07)

Background

Japan - Production grows at a declining rate in Apr’07

Conclusion ( click on image for a bigger visual)

Orders can be expected to range between a growth of 3% p.a and a contraction of -17% p.a from end’07 to mid ‘08

Related links

• Japan - Dramatic fall in new orders in Mar’07 ( strongest fall since May ‘02 )
• USA - New orders grow for the first time since Sept’06
• Europe - New Orders grow in Mar’07

• Japan - Production grows at a declining rate in Apr’07
• Euro area - Production (IIP) grows in Feb’07
• USA - Production grows in Mar’07 at the slowest pace since Sept’05
• UK - Production - annual growth rate slips to a negative in Mar’07
• India - Production grows in Mar’07

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Situation

• On a monthly basis production has contracted by -0.09%  ( -0.28% drop in Mar’07)
• On a yearly basis production has grown by 2.48 % p.a ( 3.16 % p.a in Feb’07)

Background

• Production decreased, Shipments and Inventory increased, Inventory Ratio decreased.
• Dramatic fall in new orders in Mar’07 ( strongest fall since May ‘02 )
• Japan - Production growth rate drops in Mar’07

Conclusion ( click on image for a bigger visual)

• Production can be expected to grow at a rate of 1.80% p.a - 1.40% p.a towards Jul’07
• Growth rate range between 0% - 3% p.a towards end 2007

With production down - Japans GDP cannot be expected to offer a very positive picture for Q2 and Q3 2007.

Compounding this situation,  the Bank of Japans statement after the last monetary Policy meeting suggests that they may consider interest rates hikes giving a priority to inflation - even if effects growth

Related links

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Situation

• On a monthly basis orders grew by 0.30%  ( 4.1 % in Mar’07)
• On a yearly basis orders grew by 0.978 % p.a ( dropped by -1.019 % p.a  in Mar’07)

Background

• Shipments, up two consecutive months, increased 0.8% (2.1% March increase)
• Inventories, up thirteen of the last fourteen months, increased 0.5%. This was at the highest level since the series began and followed a 0.2 percent March increase. The inventories-to-shipments ratio was 1.24, down from 1.25 in March.

Conclusion

1. We can expect an initial range between - 2.0% p.a and +2.5% p.a growth 
2. A drop down towards -5.0% p.a to -6.0% p.a towards end of 2007 early 2008

Related links

• USA - New Orders declines in Mar’07
• Europe - New Orders grow in Mar’07
• Japan - Dramatic fall in new orders in Mar’07 ( strongest fall since May ‘02 )

• Euro area - Production (IIP) grows in Feb’07
• Japan - Production growth rate drops in Mar’07
• USA - Production grows in Mar’07 at the slowest pace since Sept’05
• UK - Production - annual growth rate slips to a negative in Mar’07
• India - Production grows in Mar’07

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Situation

• On a monthly basis orders grew by 2.90%   ( -0.59 % drop in Feb’07)
• On a yearly basis orders grew by 10.21 % p.a ( 5.94% p.a growth in Feb’07)

Background

• Interest rates have been raised in Dec’06 towards 3.5% and in Mar’07 towards 3.75%.
• Members of the ECB have said that interest rates would again be be increased in Jun’07
• Orders have been declining since the interest rate hike in Dec’06

Conclusion

1. The orders growth can be expected to range between 4.5 % p.a to 9.5 % p.a initially ( Mid ‘07 )
2. Post this - growth looks like droping to a “0% ” after Mid ‘07 towards mid ‘08

Related links

• Europe - New Orders growth rate drops in Feb 2007
• USA - New Orders declines in Mar’07
• Japan - Dramatic fall in new orders in Mar’07 ( strongest fall since May ‘02 )

• Euro area - Production (IIP) grows in Feb’07
• Japan - Production growth rate drops in Mar’07
• USA - Production grows in Mar’07 at the slowest pace since Sept’05
• UK - Production - annual growth rate slips to a negative in Mar’07
• India - Production grows in Mar’07

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