Archive for June 1st, 2009
June 1st, 2009
EEF says conditions are tough but more stable, while pace of economic decline is expected to slow dramatically next quarter
Further signs that the recession may be bottoming out have emerged, with manufacturers saying trading conditions should improve this year and business leaders expecting the pace of economic decline to slow markedly in the next quarter.
The EEF manufacturers’ organisation said trading conditions remained tough in the last quarter but the recession seemed to be stabilising in some sectors as destocking nears an end. However, it could not say when growth would return.
Lee Hopley, head of economic policy at the EEF, said: “It looks like manufacturers are now close to the bottom of the cycle. Nevertheless, there are big question marks about when we will see any substantive signs of a recovery in demand.”
She cautioned that the government cannot afford to lose focus on the economy. “While companies are preparing for the upturn, the government and the Bank of England need to ensure they can access the support they need from banks and credit insurers,” she said.
The Bank’s monetary policy committee will meet later this week to set interest rates, currently at a record low of 0.5%. It is widely expected to make no change.
“Any further action by the Bank of England to boost economic activity will be centred on extending its quantitative easing programme,” said Howard Archer at economic forecasters IHS Global Insight.
Meanwhile, BDO Stoy Hayward said in a report released today that UK businesses expected the pace of decline to slow markedly next quarter, with the economy shrinking just half as fast as in recent quarters.
Peter Hemington, a partner at the accountancy firm, said: “These figures are good news, but we can’t call the end of the recession yet. Official figures suggest that there has been little recovery in bank lending. The banks still need time to sort themselves out, and it seems that there is insufficient capital in the system.”
The housing intelligence group HomeÂtrack said that house prices did not change in May, after nearly two years of falls. But the group said the outlook for the housing market remained fragile: a number of factors could derail the recent pick-up in market activity.
Source: guardian.co.uk © Guardian News and Media Limited 2009
June 1st, 2009
Economic activity in the manufacturing sector failed to grow in May for the 16th consecutive month, while the overall economy grew for the first time following seven months of decline, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.
The report was issued today by Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Managementâ„¢ Manufacturing Business Survey Committee. “While employment and inventories continue to decline at a rapid rate and the sector continued to contract during the month, there are signs of improvement.
May is the first month of growth in the New Orders Index since November 2007, with nine of 18 industries reporting growth. New orders are considered a leading indicator, and the index has risen rapidly after bottoming at 23.1 percent in December 2008. Also, the Customers’ Inventories Index remained below 50 percent for the second consecutive month, offering encouragement that supply chains are starting to free themselves of excess inventories as nine industries report their customers’ inventories as ‘too low’. The prices that manufacturers pay for raw materials and services continued to decline, but at a slower rate than in April.”
PERFORMANCE BY INDUSTRY
Five of the 18 manufacturing industries reported growth in May. These industries — listed in order — are: Nonmetallic Mineral Products; Plastics & Rubber Products; Machinery; Food, Beverage & Tobacco Products; and Printing & Related Support Activities. The industries reporting contraction in May — listed in order — are: Textile Mills; Furniture & Related Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Primary Metals; Transportation Equipment; Computer & Electronic Products; Wood Products; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Chemical Products; Petroleum & Coal Products; and Paper Products.
WHAT RESPONDENTS ARE SAYING …
- “Some amount of havoc is about to erupt, with companies pushing for increased capacity when suppliers have taken capacity offline.” (Computer & Electronic Products)
- “Business is actually better than plan.” (Food, Beverage & Tobacco Products)
- “Realistically, we don’t see any of our major customers looking to place business until mid-2010 at the earliest.” (Machinery)
- “April was flat on sales. May looking better.” (Primary Metals)
- “Business still trending downward, but not as fast.” (Chemical Products)
See the rest of the report here… ISM
June 1st, 2009
In a recent call for vouchers for buying new cars, Congressman Manzullo disclosed these pertinent factos about the impact of new car sales:
 Every one million in new vehicle sales has the following impact on the economy:
Creates 60,000 jobs (10,000 at vehicle assembly plants; 50,000 at suppliers, auto dealers, and other businesses).
Provides $750 million in tax revenue to the federal government.
Provides $1.4 billion in sales tax revenue to states.
Saves federal government $1.4 billion in unemployment payments and food stamps.
Now, if we can get Chrysler and GM out out Chapter 11, maybe we can start to see some recovery.
