Downhill from here? Headline trade growth remained elevated last month. But trade volumes dropped back in levels terms and, while supply constraints are partly to blame, there are signs that demand may have peaked too. Export growth dropped back from …
7th June 2021
Retail sales pick up strongly as recovery takes hold Russian activity data for April were relatively strong and suggest that a sustained recovery is taking hold in Q2 thanks to an easing of virus restrictions on services sectors and continued rebound in …
4th June 2021
Continued restrictions weigh on employment The continued coronavirus restrictions caused employment to fall for the second month running in May but, with re-opening now underway across the country, employment should rise strongly in the coming months. The …
Supply shortages holding back employment recovery The 559,000 gain in non-farm payrolls in May was at least an improvement on the 278,000 gain in April but, with the level of employment still 7.6 million below its pre-pandemic peak, it would take more …
High materials prices fail to stifle strong activity Construction output rose further above pre-virus levels in May despite growing shortages of contractors and materials, and high cost inflation. The rise in the headline construction PMI from 61.6 in …
Sales back below pre-pandemic levels, but only temporarily Euro-zone retail sales fell back again in April to below their pre-pandemic levels. But the re-opening of non-essential retail throughout much of the euro-zone in May means they will have improved …
Ongoing decline in stocks to help lift oil prices a little higher US commercial crude stocks declined for the fifth week in a row, owing to the robust economic recovery and a further increase in inputs to refineries. With demand set to rise further, and …
3rd June 2021
Non-oil sector recoveries to pick up the pace in H2 May’s batch of whole economy PMIs were a mixed bag suggesting that economic recoveries in the Gulf are struggling to gather momentum for the time being. But, with vaccination programmes strengthening and …
Recovery accompanied by growing price pressures The PMIs are consistent with the euro-zone’s economic recovery gathering pace in May. Price pressures in the manufacturing sector are intensifying, but we still think that higher inflation will be temporary. …
Inflation eases, but President Erdogan will have to wait for rate cuts The latest falls in the lira mean that, despite the fall in Turkey’s headline inflation rate to 16.6% y/y last month, the central bank (CBRT)will probably leave interest rates …
Recovery beyond the second virus wave will be slow India’s PMI readings for May adds to evidence elsewhere that the damage from the second virus wave has not been as severe as when the pandemic first struck last year. But with restrictions likely to be …
Drag from net trade may persist The trade surplus widened again in April but that was largely driven by higher commodity prices. Export volumes will need to recover further in the months ahead to prevent trade from being a drag on GDP growth yet again in …
Slow jobs recovery means employment in largest metros still 10% down Employment growth in the three-months to April was positive in all 30 of the largest metros. However, the rate of growth remains slow as labour shortages weigh on the jobs recovery. As a …
2nd June 2021
Industry hit in April, but probably turned the corner in May The worse-than-expected 1.3% m/m decline in Brazilian industrial production in April is likely to be followed by a partial recovery last month. That said, the latest surveys suggest that …
Stretched affordability weighs on housing demand Home purchase mortgage demand continued its downward trend in May and is now broadly in line with its pre-virus level. Easing credit conditions and the reopening of the economy will provide some support to …
Pick-up in approvals after stamp duty deadline extended Mortgage approvals for house purchase rose for the first time since November in April as prospective buyers responded to the extension of the stamp duty holiday. But even before that modest increase, …
Consumers funding spending by saving less, not borrowing more April’s money and credit data suggests that consumers were still wary about taking on any additional debt. But even if consumers’ willingness to borrow remains limited, they have enough …
Net lending expected to stay negative in the near-term We think a reduced willingness by lenders to allow for further payment holidays probably explains the sharp fall in net lending to property in April. Looking ahead, we expect subdued transaction …
Recovery set to slow as GDP already above pre-virus peak Australia's GDP surpassed its pre-virus level in Q1 but with the vaccination rollout still slow and a fresh lockdown in Melbourne, the recovery is set to slow . The 1.8% q/q rise in Q1 GDP was …
Labour shortages emerging as key restraint While the headline ISM manufacturing index edged up to 61.2 in May, from 60.7, the main takeaway from the release was that shortages of workers, and not just raw materials, now appear to be playing a key role in …
1st June 2021
After strong Q1, growth appears to have slowed sharply in Q2 The first-quarter data confirm that the economy took the second coronavirus wave in its stride but, with the preliminary estimate showing that GDP fell in April, the third wave has been much …
Economy showing resilience to virus waves The 1.2% q/q expansion in Brazil’s GDP suggests that the economy held up well during the country’s second virus wave and more timely figures point to a rapid recovery from the more recent third wave. These figures …
Inflation heading higher but will fall back next year The jump in euro-zone inflation to 2.0% in May will not be the end of the upward trend, but we expect inflation to drop back sharply next year as temporary factors are reversed. May’s increase in HICP …
PMI up, but headwinds remain The rise in South Africa’s manufacturing PMI in May points to an improvement in underlying economic conditions in the sector, but we think that the recovery will be held back by key headwinds including another virus surge, …
Swiss economy already putting weak start to 2021 behind it Data released this morning confirmed that the Swiss economy started 2021 on the back foot following a tightening in virus-related restrictions. However, activity will have gathered pace in Q2. The …
Price pressures intensify further in Poland and Czechia The rise in the manufacturing PMIs to fresh record highs for Czechia and Poland in May was driven by output and new orders, but supply issues have continued to push up input and output prices. In …
Prices continue to surge The boost to demand from the extension to the stamp duty holiday caused annual house price inflation to hit a seven-year high in May, and it is set to rise further in June. Thereafter, the end of the tax break should cause house …
Manufacturing takes a hit, recovery ahead likely to be gradual The drop in India’s manufacturing PMI to a ten-month low in May suggests that activity has taken a hit from the second virus wave despite the sector being largely exempt from containment …
Exports on renewed upwards path Korean export values surged to an all-time high in May, suggesting that the external sector will drive GDP higher once again this quarter. The timely nature of the Korean trade data makes them a good bellwether for the …
Industry remains strong but supply shortages worsening Unlike the official PMI survey released yesterday, the Caixin manufacturing index published today rose last month. The key takeaway is that while output edged up on the back of still strong demand, …
Surge in industry softens slightly, but sector still going strong The May PMIs softened slightly but were still mainly consistent with improvements in manufacturing sectors. Strong global demand for electronics will continue to support output over the …
House prices may decline in 2022 House prices are surging but forward indicators point to growth slowing in the months ahead. Indeed, we suspect prices may decline a little in 2022. Across the eight capital cities, house prices rose by 2.3% m/m in May, …
Solid Q1 gives way to Q2 contraction The smaller than expected rise in Indian GDP in Q1 will be followed by a significant contraction in Q2 caused by the virus surge and tightening of containment measures. While the real-time activity data have bottomed …
31st May 2021
Supply shortages continue to stoke price pressures The latest surveys suggest that stronger construction activity nudged up overall growth this month and that supply shortages are pushing up prices even as final demand for manufactured goods appears to be …
Output unlikely to recover in Q2 The sharp fall in retail sales and weaker than expected rise in industrial production in April suggests the economy was subdued even before states of emergency were declared, supporting our view that the economy won’t have …
Near-term upgrades at the expense of slower recovery in values later on While the IPF Consensus Forecasts saw notable upgrades for this year and next, t his comes at the expense of weaker performance in all sectors later in the forecast period. Despite …
28th May 2021
Region recovering quickly, but price pressures rising The EC’s Economic Sentiment Indicators showed strong increases in most countries in May, largely driven by improvements in services sentiment as economies have started to re-open. This is likely to be …
Economy recovering As Covid restrictions continue to be lifted, it is no surprise that economic sentiment in the euro-zone improved in May. The EC survey also showed that input shortages are causing price pressures to intensify, but we still think that …
Unemployment rate to edge back down The unemployment rate spiked back up in April after a surprise sharp fall in March. However, we think the jobless rate will fall back to around 2.6% over the coming months as employment resumes its recovery. Employment …
Orders held back by shortages in motor vehicle sector The 1.3% m/m decline in durable goods orders in April partly reflected the impact of semiconductor shortages in the automobile sector, with motor vehicle orders falling by 6.2% m/m last month. …
27th May 2021
Capital investment rebound to continue We estimate that private investment rose by 4.1% q/q in Q1 and firms’ expectations of future capital expenditure suggest the strong rebound in investment is set to continue in the months ahead. Today’s private …
Stars aligning for higher oil prices Last week’s decline in US crude stocks adds to evidence that the oil market is getting tighter. This supports our view that oil prices have further to rise in the months ahead, before higher OPEC+ supply brings the …
26th May 2021
House price growth regains momentum House price growth accelerated in March, reaching a record high of 13.9% y/y on the FHFA measure. But there are signs that the boom in prices is now weighing on housing demand and activity. New home sales dropped 5.9% …
25th May 2021
Inflation jump to keep Copom hiking in June The further rise in Brazilian inflation, to 7.3% y/y in the middle of May, can partly be pinned on unfavourable base effects, but there are also signs of a broader increase in goods inflation. While this …
Recovery underway The Ifo Business Climate Index (BCI) for May suggests that an economic recovery is now underway in Germany, as the lifting of restrictions outweighs any adverse effects from supply bottlenecks in the manufacturing and construction …
Borrowing undershoot likely to continue April’s public finances figures showed that the government’s financial position isn’t as bad as the Office for Budget Responsibility (OBR) predicted only two months ago, reinforcing our view that the tax hikes and …
Recovery to resume at a decent pace in the second half of 2021 Revised Q1 GDP data show that Singapore’s economy grew more strongly than first thought at the start of 2021. While a resurgence in virus cases is likely to drag on GDP this quarter, this …
Underlying price pressures starting to build The drop in Mexico’s headline inflation to 5.8% y/y in the first half of May was driven by a sharp fall in energy inflation. While we expect that this trend will continue in the coming months, there are signs …
24th May 2021
Soft start to Q2, recovery to start from May onwards The m/m fall in industrial production and retail sales in Poland in April confirmed that the country’s third virus wave caused the economy to start the quarter on a soft note. But with new virus cases …
Home sales have further to fall Existing home sales recorded another decline in April and are down 13% from the peak last October. Home sales are being constrained by record low inventory, which will continue to weigh on housing market activity in the …
21st May 2021
