Key Statistics: 10th September 2012

Construction

• The total volume of all new construction orders in the second quarter of this year is estimated by the ONS to have increased by 0.2% compared to the first quarter of the year, while compared to the second quarter of 2011 total new orders are up 11.1%.
• Most positive is the 31.5% increase in new work for the public non-housing sector, compared to the first quarter of the year.
• The house building sector also performed well with both private and public housing new orders increasing by 9.2% and 7.2% respectively compared to the first quarter of the year.
• These gains were offset slightly by declines in the infrastructure and private industrial sectors, which fell 20.4% and 13.3% respectively compared to the first quarter of the year.

• House prices, as measured by the Halifax House Price index were down 0.3% for the three month period to August this year compared to the previous three month period. Although the index has proven to be volatile throughout the year, house prices in August appear to be at the same level that they started the year at.

UK Economy

• The ONS reported that the overall index of production for July 2012 was down 0.8% on the same period last year. Manufacturing, accounting for 67% of total UK production, declined by 0.5% over the same period. The greatest declines by broad manufacturing sector were in the output of wood, paper products and printing, which fell 8.4% and chemicals and chemical products which fell 8.0%. 

• Mergers and acquisitions activity involving UK companies has been extremely subdued in 2012, the ONS confirmed that the total value of UK M&A activity is about a quarter of what it was in the first half of 2011.
• The value of foreign acquisitions by UK companies has suffered particularly badly with only £4.7bn worth of deals in the first half of this year compared to £31bn in the first half of 2011. More positively the majority (£3.9bn) of these deals were done in the second quarter of this year hinting to signs of a recovery in activity.
• The value of acquisitions in the UK by foreign companies is also down, with £6.8bn worth of deals in the first half of the year compared to £15.5bn for the same period last year.

• Producer price inflation increased as measured by the output price index, for the year to August 2012 the index rose 2.2% compared to 1.8% for the same period last month.
• Input prices; the cost of materials and fuel purchased by UK companies, increased by 1.4% for the year to August.

• The Bank of England Inflation Attitudes Survey for August continued to point towards a slowdown in the rate of inflation in the coming year. Respondents gave the following answers:

• They estimated the current rate of inflation at 4.1%, down from 4.7% in the previous May survey.
• That the expectation for the rate of inflation over the coming year was 3.2% down from 3.7% in May.
• 35% expected interest rates to rise over the next 12 months, compared to 41% in May.