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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (38913)	10/11/2005 10:25:51 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

DATAWATCH UK record trade deficit in Aug masks export pick-up Tuesday, October 11, 2005 10:44:01 AM afxpress.com LONDON (AFX) - UK exports, particularly on the manufacturing side, appear to be on the rise even though official figures showed the country recording its biggest ever monthly trade deficit in August Though the office of National Statistics revealed that an estimated 1.4 bln stg worth of insurance claims in the wake of Hurricane Katrina pushed the total trade deficit to a record 5.3 bln stg, analysts pointed out that much of the slippage on the goods side of the accounts was purely due to a deterioration in the oil balance as a result of maintenance work in the North Sea Stripping out the oil and hurricane effects, analysts noted that exports are recovering, especially on the volumes side. Total exports were up 5.1 pct during August and were up 7.1 pct when oil and erratics were excluded "Aside from the oil and insurance distortions, the underlying trade position improved in August, driven by solid export growth," said Ross Walker, economist at Royal Bank of Scotland The oil deficit of 0.4 bln stg pushed the trade in goods deficit to a record 5.6 bln stg in August, against July's upwardly revised shortfall of 5.5 bln and expectations of a modest improvement to 5.0 bln "Despite the energy-related deterioration in the value of UK trade, the volume data points to an underlying improvement in exports and a probable net trade boost to GDP for the second consecutive quarter in Q3," said John Butler, economist at HSBC. The statistics office stated that the Katrina effects are likely to be considered a price, rather than a volume, effect, when the provisional Q3 data are published in November. (They will not be included in next week's first estimate) "Overall, a fairly good set of numbers on the economic activity side, that sit oddly with other information, not least the continued contraction in manufacturing output," he added Last week's official August data showed manufacturing output down 0.2 pct from July, and below market expectations of a 0.2 pct rise. To make matters worse, the wider measure of industrial production, which also includes energy and mineral extraction, fell a monthly 0.9 pct, due mainly to poor performances in oil and gas and the mineral and quarrying sub-sectors. Despite the disparity between the two sets of data, analysts noted that today's trade numbers suggested that manufacturers are beginning are enjoying an exports boost. "By sector, manufacturers exports rose 6.5 pct in August and 1.1 pct over the past year, which sits oddly with the survey evidence to the contrary and the official manufacturing output data that shows a sector still contracting," said HSBC's Butler