Exports probably rebounded in September The small fall in goods exports in August was partly due to temporary factors and the timelier data suggest they rebounded in September. With overall imports nevertheless likely to recover more strongly in the …
6th October 2020
Construction growth edges up in September The construction PMI strengthened in September, driven by an improvement in both the commercial and residential sectors. Still, with fresh virus restrictions likely to hit commercial occupier demand further, …
Signs of life in the recovery The rise in the September PMIs is a welcome sign that the economic recovery still has legs. But with new virus cases in India still high, the road to normality will almost certainly remain long and difficult. The PMI readings …
Trade was probably a drag on growth in Q3 The trade balance narrowed again in August and we think that trade was probably a drag on growth in the third quarter. The fall in the trade balance from $4652mn in July to $2643mn in August was much weaker than …
PMIs rise, but recoveries to remain slow-going September’s whole economy PMIs from across the Middle East and North Africa all rose as a further easing of virus containment measures supported another pick-up in economic activity. But against the backdrop …
5th October 2020
Recovery may be going into reverse The increase in retail sales to above their pre-crisis level in August overstates the strength of the recovery in household consumption. Spending on travel, hospitality and entertainment will have remained much weaker …
Inflation steady but set to rise, prompting more monetary tightening Turkey’s headline inflation rate was unchanged for a third consecutive month at 11.8% y/y in September but we expect it to rise over the coming months. And with the lira still under …
Industry to maintain momentum PMI readings for Korea and Taiwan suggest industry in both countries picked up momentum last month, and we expect output to continue growing in the months ahead on the back of strong exports. PMIs for September were released …
Pace of recovery slowing The weaker than expected 661,000 rise in non-farm payrolls last month was in part due to a drop in government education employment but, with the pace of private payroll gains continuing to slow gradually, it is clear that the …
2nd October 2020
Nearing pre-crisis levels The 3.2% m/m rise in Brazilian industrial production suggests that the sector has now returned to close to its pre-crisis level of output. But the data also provide some early confirmation that the surveys for the sector (which …
Inflation to remain far below target even as temporary effects unwind September’s decline in euro-zone core inflation to a fresh record low was partly due to temporary factors that will be reversed in October. And the downward trend in core inflation this …
Unemployment rate might not reach 4% The unemployment rate edged up again in August and it will undoubtedly rise further over the coming months. But with the jobless rate only creeping higher in recent months, our forecast for it to reach 4% by year-end …
Manufacturing recovery has much further to run The modest decline in the ISM manufacturing index to 55.4 in September, from 56.0, suggests that manufacturing output will continue to grow at a relatively faster pace, as producers catch up with the …
1st October 2020
Small rise a taste of things to come The small rise in the euro-zone unemployment rate in August suggests that the winding back of short-time work schemes is already starting to take its toll on the region’s labour market. With governments set to provide …
Rocky road to recovery The rise in in South Africa’s manufacturing PMI in September suggests that further easing of the country’s lockdown measures has boosted activity. But there remain many obstacles to a sustained rebound in the sector. Figures …
Rising order backlogs to sustain industrial rebounds While Swiss inflation has risen since reaching a trough in June, it is likely to stay very weak in the near term. Meanwhile, the positive set of September manufacturing PMIs from Switzerland and Sweden …
Pace of the manufacturing rebound slows in September The mixed batch of manufacturing PMIs across Emerging Europe for September suggest that the initial rebound in activity over the summer started to run out of steam at the end of Q3. The recovery is …
Strength in manufacturing PMI won’t be sustained The jump in September’s manufacturing PMI reading to its highest in over eight years is a much-needed sign that the recovery still has some legs. But with India now a virus epicentre, containment measures …
Export recovery to gradually continue Korean export values held steady in September at a touch below pre-crisis levels, and we expect gradual improvements in the months ahead. Korean trade data provide a good guide to the performance of exporters …
Housing downturn approaching its trough The housing downturn continued its run in Sydney and Melbourne in September, but prices rose again in the other six capital cities and we think nationwide prices will reach a trough by the end of this year before …
Recovery set to be slow going The rebound in the Q3 Tankan fell short of expectations and suggests that the recovery could be protracted. And while the survey indicates that the labour market will soon turn the corner, firms’ capital spending plans point …
Recovery in refinery throughput to weigh on stocks in the coming months US commercial crude stocks fell a touch as exports rose. And despite implied product demand dropping back, a revival in refinery activity is likely to act as a drag on crude stocks in …
30th September 2020
On track for record third-quarter expansion The 3.0% m/m rise in GDP in July and the likely 1.0% increase in August put the economy on track for a 45% annualised expansion in the third quarter. Renewed restrictions are set to weigh on growth in the fourth …
Industrial recovery stutters The recent improvement in output in the core infrastructure industries came to an abrupt halt in August. With India now a virus epicentre, containment measures are likely to remain in place for a long time yet, which will …
Softer inflation unlikely to change policymakers’ mind The slight fall in South African inflation, to 3.1% y/y in August, is likely to be followed by subdued inflation rates over the next few months. Even so, the SARB’s easing cycle has now come to an …
Switzerland comparatively well placed The increase in the KOF Economic Barometer in September, to a fresh decade high, suggests that the Swiss economy gathered momentum going into Q4. While the second waves of virus cases in parts of Europe are a downside …
Economy slumps, recovery already stuttering Saudi Arabia’s economy contracted by 7.0% y/y in Q2 on the back of the virus containment measures and oil production cuts. And even though containment measures have started to be lifted, the imposition of harsh …
House price growth surges again House prices are rising at their fastest rate in four years. But price gains are likely to slow as the pent-up demand driving the market now is expended. Looking ahead, we think a weak underlying economy and the end of the …
Government passing the pain to households and businesses The bulk of the pain of Q2’s slump in GDP had been borne by the government rather than households and businesses. But with the recovery already flattening off, fiscal support fading and the full …
Rebound still going strong The latest PMIs show that economic activity continued to accelerate in September on the back of a broad-based improvement in both services and manufacturing. The Caixin manufacturing PMI edged down fractionally, from 53.1 in …
Recovery in activity to continue Retail sales rebounded back to pre-virus levels in August as the second wave began to dissipate, and we expect consumer spending to recover further over the coming months. Meanwhile, industrial production edged higher in …
House prices rise as inventory hits record lows House price growth saw a further acceleration in July, as solid housing demand and low inventory put upward pressure on home values. With mortgage rates set to stay close to record lows, and no improvement …
29th September 2020
Euro-zone at risk of contraction The small improvement in the EC’s Economic Sentiment Indicator for September was slightly better than anticipated. However, the index remained at a low level, and we suspect that it has not accurately captured the negative …
Surge in virus cases yet to weigh on sentiment The further rise in the EC’s Economic Sentiment Indicators for September suggests that the recovery continued this month, albeit at a slower pace. However, we suspect that the recent rise in virus cases …
Housing market on fire, but consumers seem lukewarm While the resurgence in the housing market continued in August, consumer credit barely rose. And the darkening clouds on the economic horizon may tempt some households to start to rein in spending in the …
Strong bounce in house purchase lending continues August’s lending data showed another sharp increase in house purchase approvals. But, while this buoyancy may last for a few more months, the current spike in demand is likely to be short-lived. With the …
Net lending likely to turn negative again Having fallen sharply in July, net lending to property was practically flat in August. As the recovery in transaction activity show signs of slowing and banks are less willing to grant further payment holidays, we …
Regional outperformer Vietnam’s economy rebounded in the third quarter and should continue to perform strongly over the coming year. A surge in exports to the US, aggressive rate cuts by the central bank and the government’s success in containing the …
Details much stronger than headline figures suggest The 0.4% m/m rise in headline durable goods orders in August was weaker than we had been expecting, but the underlying details nevertheless show that business equipment investment staged a V-shaped …
25th September 2020
Fiscal support to fade in the autumn The government borrowed another huge sum of £35.9bn in August as it continued to absorb much of the cost of the COVID-19 crisis. But while the Chancellor announced some modest further support yesterday, the big picture …
Supply of new homes falls to 57-year low Another strong rise in new home sales in August, to a 14-year high, pushed the months’ supply of homes to its lowest since records began in 1963. With housing starts constrained by surging lumber prices and lot …
24th September 2020
Headwinds rising for global steel production Global steel production continued to recover in August. However, new regulatory measures affecting the property market in China – along with the re-introduction of virus-related restrictions elsewhere – could …
Higher inflation won’t yet put an end to the easing cycle The further rise in Mexican inflation, to 4.1% over the first half of September, was mainly driven by higher food and fuel prices. We suspect that the central bank will look past this and cut its …
Rebound has petered out The very small increase in the Ifo Business Climate Index for September is further evidence that the recovery has run out of steam. Germany’s export-oriented manufacturing sector is still expanding but this is likely to be offset …
It’s a bumpy road, but demand is recovering US commercial crude stocks dipped as net imports eased back and production edged lower. Product stocks also fell, in part due to lower refinery activity but also as a result of a tick-up in implied demand . …
23rd September 2020
House price growth accelerates as demand booms House price growth saw another strong gain in July, as surging demand and record low inventory put upward pressure on values. But with demand set to ease over the coming months, and mortgage lending standards …
Food price spike drives headline rate up The further rise in Brazilian food inflation pushed up the headline rate to 2.7% y/y in the first half of September but, with core inflation still extremely soft, we doubt the central bank will be concerned. …
Recovery flattens out The drop in the composite IHS Markit/CIPS Flash PMI suggests that the recovery has already started to flatten out in September. And reinstating restrictions on business opening hours and encouraging people to work from home again …
Virus fears and restrictions weigh on activity The further decline in the euro-zone Composite PMI in September adds to the evidence that the initial rebound in activity has already run out of steam. And with new restrictions being imposed throughout the …
