Details of the December 2016 UK Markit CIPS construction PMI data report 4 January 2016
Housing activity 54.9 vs 53.0
Input costs at the highest since Apr 2011 (Level of GBP blamed for that)
New orders strongest for 11 months
Employment rose at the fastest since May
Another decent PMI to end the year with.
“December’s survey data confirmed a solid rebound in UK construction output during the final quarter of 2016. All three main areas of construction activity have started to recover from last summer’s soft patch, but in each case growth remains much weaker than the cyclical peaks seen in 2014.
A reversal in U.S. trade policy could make 2017 the year that efforts to build multinational trade zones crumble, returning the focus to tough, bilateral dealmaking.
In October 2015, officials from 12 nations including the U.S. and Japan gathered in the American city of Atlanta to ink the historic Trans-Pacific Partnership, confident of the dawning of a new age of trade governed by such high-level, multilateral agreements. Yet that dream lies all but dead just over a year later, not least due to Donald Trump’s presidential victory and his pledge to pull the U.S. from the agreement upon taking office Jan. 20.
Many bilateral free trade agreements, which reduce or abolish tariffs and set rules for trade in goods and services between two nations, have been struck over the years. Multilateral agreements extend this notion to the regional level and improve security in the areas they cover, further greasing the wheels of commerce.
Yet Trump prefers his trade pacts one on one — the better to drive hard bargains, leveraging U.S. economic and diplomatic might to secure the most advantageous terms. Multilateral pacts involve far more careful compromise and require each nation to give and take small concessions rather than pushing for an unambiguous win.
With consumption spends in rural and urban India stifled by the acute scarcity of cash, the economy is set to clock sharply lower levels of growth in the current and coming quarters. While the initial days of demonetisation saw economists merely pruning their growth estimates, the cuts could get bigger.
Nomura, for instance, believes there is a downside risk to its Q1 GDP growth projection of 6.9% y-o-y. “Near-term growth may fall much more than expected,” economists at the brokerage wrote. They alluded to proprietary indicators which had slumped to their lowest level since the series started in 1996 and were consistent with a below 6% GDP growth.
While sales have decelerated across markets, given the larger volume of cash transactions, the hinterland has been hurt far more than urban areas.
There is some encouraging news for the Bank of Japan to take into this week’s policy meeting as trade data showed the pace of deterioration in imports and exports during November eased and came in better than forecast.
The pace of import growth improved to minus 0.4 per cent year-on-year in November from a 10.3 per cent contraction in the previous month. This was a better result than the average 2.3 per cent decline expected by economists.
Similarly, there was also an improvement in export growth last month, which showed a contraction of 8.8 per cent year-on-year contraction, almost half the 16.5 per cent decline in October. Economists expected a 12.1 per cent drop.
Imports have contracted for 23 months in a row, and had previously shown positive growth in December 2014. November was still the smallest contraction since August of last year. November was the 14th month in a row that exports have contracted, and also the best result since September 2015, the previous time exports grew.
Japan’s trade surplus narrowed to ¥152.5bn($1.29bn) last month from a revised ¥496bn (previously ¥496.2bn) in October. On an unadjusted basis the trade surplus rose to ¥536.1bn last month from a revised ¥466.8bn (previously ¥474.3bn). Both versions of the trade surplus came in below expectations, though.