 | | | Sunnier economic forecastsSunnier economic forecasts heralded as service and manufacturing sectors expand alongside renewed consumer confidence.
UK and Euro Zone PMI shows economic expansion and "GDP growth on the horizon". Irish GNP forecasts revised as international outlook becomes "less pessimistic". Credit card lending increased by £0.2 billion in June. Retail markets expand as confidence returns and retailers price aggressively. Are these all clear signs of an economic recovery?
UK and Euro Zone PMI shows economic expansion and "GDP growth on the horizon".
The UK Purchasing Managers Index is the bearer of some long awaited good news, it suggests quarterly GDP growth is on the horizon. The British services sector PMI rose to 53.2 in July, its third consecutive month above the all important 50 mark, which indicates expansion rather than contraction of economic activity. The manufacturing PMI also rose above 50 in July following 15 months of falling activity.
Similarly the Euro zone PMI in the services and manufacturing sectors rose to the highest levels in 15 months. The survey shows a 3 point rise from 47 in July, to 50 in August, far outreaching the forecasts of 48.
Not only could reaching 50 constitute a tipping point, as economic growth stabilises but the August leap of 3 points represents the highest jump in the series history.
The PMI survey comes as recent statistics from France and Germany confirm GDP growth of 0.3% in the second quarter of 2009 boosting claims that the Euro zone is past the worst and is paving the path toward economic recovery. Irish GNP forecasts revised as international outlook becomes "less pessimistic".
With the improved outlook of the UK and the Euro zone, the Ulster Bank announced that things are looking "less gloomy" for the Irish economy. "Early signs of gradual recovery" were highlighted in their latest Quarterly report, confirming modest but positive changes to GNP forecasts.
Earlier predictions had suggested the Irish economy would contract by 3.5% over 2010; however the latest figures see the economy will contracting by 3.2%. More reassuring is the Bank’s belief that recovery will be export led and that year on year growth will return to the Irish economy by 2011.
Credit card lending increased by £0.2 billion in June. Recent indicators of an international economic upturn have seemingly increased confidence and bolstered credit card lending. Credit card lending increased by £0.2 billion in June according to figures from the Bank of England; a sign that credit cards providers, such as the MBNA credit card company, are more able to provide low rate credit cards to consumers as the economic outlook improves and confidence returns.
Retail markets expand as confidence returns and retailers price aggressively. The British Office for National Statistics has reported rises in retail sales. The volume of retail sales in July 2008 was 3.3% higher than in July 2008. Increased confidence in the housing market has pushed up demand for household items by 4.5 per cent; the sector’s highest growth in three years. Retail sales in food stores, clothing, footwear and textiles stores also showed year on year increases.
In Ireland retail sales were up by 2.2 per cent in June and have been growing month on month for five consecutive months. The increase in Irish retail sales is thought to have been brought about by the aggressive price cutting response of retailers. Despite these early signs of renewed confidence and increased consumer spending, the volume of retail sales remains down 9.9 per cent on last year. | | | |
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