Indicator scoreboard
EMU - June seasonally adjusted industrial output rose 0.6 percent and 1.4 percent when compared with last year. Second quarter industrial output remained weak, falling 0.8 percent on the quarter. The monthly rise surprised most analysts who were mainly focused on German industrial output data released by the Finance Ministry and Bundesbank, which showed a monthly decline of 0.4 percent in June. But Eurostat uses data published by the Federal Statistics Office, which employs a different seasonal adjustment method than the Finance Ministry/Bundesbank. The Statistics Office data, in contrast, showed a 0.8 percent rise for the month. Note that Eurostat will be using Bundesbank data for its calculations in July. Most sectors showed higher output led by a 0.9 percent rise in durable consumer goods and a 0.5 percent rise in capital goods. Non-durable consumer goods output rose 0.2 percent.

Germany - July Ifo Institute west German business sentiment index rose to 89.8 from 89.5 in June, the first increase since January. The increase was paced by stronger expectations, which rose for the first time since October last year. The expectations subindex rose to 95.0 from 93.5 in June. The Ifo current conditions subindex dropped again for the sixth month in a row, down to 84.8 from 85.4 in June.

Second quarter real seasonally adjusted gross domestic product was virtually unchanged (the decline was less than 0.05 percent). A healthy rise in consumer spending wasn't enough to offset weak investment, inventories, and net exports, according to the Federal Statistics Office data released Thursday. GDP rose 0.6 percent when compared with last year. Most GDP categories declined in the second quarter. Investments dropped 1.3 percent after a 1.1 percent decline in the first quarter. The only positive impulse came from private consumption. Domestic demand increased slightly while net exports subtracted from GDP.

August preliminary pan-German national consumer price index and harmonized index of consumer prices both fell 0.2 percent but rose 2.6 percent when compared with last year. According to German states' CPI data, consumer prices fell mainly due to lower prices for seasonal food, motor fuels, clothing and shoes and package vacations. These declines were partly offset by higher prices for heating oil and electricity, gas and solid fuels.

June manufacturing orders were revised down to a decline of 2.7 percent from the originally reported decline of 2.5 percent. Second quarter data were revised up to a decline of 1.5 percent from the 2.0 percent drop originally reported. Second quarter foreign orders were revised up to a 0.7 percent gain from a 0.2 percent gain while domestic orders were revised up to show a drop of 3.2 percent compared to the 3.7 percent decline originally reported. Starting with the June final results, the Bundesbank's definitions in its manufacturing orders and production indexes will conform to EU standards. In addition, the method for seasonal adjustment of manufacturing orders data will be changed from the present Census-X-11 to the new Census-X-12-ARIMA in the near future.

June industrial production was revised up to an increase of 0.1 percent from the originally reported decline of 0.4 percent. Second quarter industrial production growth was revised up slightly to a decline of 2.2 percent from 2.3 percent. The June final results reflect changes to the main groupings of the production index. In addition, the method for seasonal adjustment of industrial production data has been changed from the Census-X-11 to the new Census-X-12-ARIMA.

July seasonally adjusted producer prices fell 0.7 percent in July but rose 3.2 percent when compared with last year. Non-seasonally adjusted producer prices in pan-Germany were down 0.5 percent on the month and up 3.1 percent on the year.

July seasonally adjusted import prices fell 1.5 percent but were up 1.7 percent when compared with last year. July seasonally adjusted export prices declined 0.2 percent and rose 1.1 percent on the year.

France - June seasonally adjusted merchandise trade surplus widened to E1.222 billion. Seasonally adjusted exports rose 1.5 percent thanks to the continued strength of auto, pharmaceutical and naval exports (in particular the sale of an ocean liner to Italy) and the recovery of semi-finished goods, electronics and livestock exports. Imports fell 1.1 percent despite a rise in the energy deficit of nearly 13 percent. The decline in capital and semi-finished goods imports was accentuated by a downturn in auto imports.

Britain - Second quarter gross domestic product rose an unrevised 0.3 percent and 2.1 percent when compared with last year. Household expenditures rose 1.2 percent and 3.7 percent year-on-year. This followed a more subdued 0.6 percent quarterly increase in the first quarter. Overall, a drop in inventories dampened GDP growth considerably. Gross fixed capital formation (investment) remained flat on the quarter. Service sector output rose 0.8 percent and was 3.5 percent above levels a year earlier. Agricultural sector output dropped 0.6 percent on the quarter, as the effects of the foot-and-mouth crisis continued.

June global merchandise trade deficit widened to Stg3.232 billion following May's Stg2.479 billion deficit. This was its highest level since records began in 1967, swollen by a sharp increase in imports of erratic items. There were higher imports of both aircraft from the United States and of precious stones. The global value of exports fell 1.7 percent on the month while the value of imports rose 2.5 percent. In the three months to June, the value of exports fell 2.8 percent, while the value of imports dropped 0.6 percent. For non-EU countries, the July value of imports fell by 7.7 percent on the month, while exports were down 0.9 percent.

Asia
Japan - The all industry activity index, which tracks service companies, manufacturers and government spending, fell 1.9 percent in the three months through June 30 from the first quarter - the first quarterly drop since 1998. Construction fell 7.4 percent and manufacturing fell 5.8 percent.

July merchandise trade surplus fell 58 percent from a year earlier to 420.7 billion yen ($3.49 billion), as exports fell and imports continued to rise. Exports by volume fell 12.4 percent from a year earlier, the seventh drop, after falling 14.2 percent in June, which was the biggest decrease since 1975. Imports rose 0.1 percent after declining 6 percent in June. By value, exports fell 4 percent in July from June while imports rose 4.5 percent.

The corporate services price index, which tracks the cost of office rents, advertising and other business costs, fell 0.9 percent in July from a year earlier. The index has declined from year-ago levels for the past eight years, except for a 12-month stretch from April 1997 to March 1998 when an increase in the sales tax temporarily boosted prices.

July sales at supermarkets and department stores fell 1.5 percent last month from a year ago, Japan Department Store Association figures showed. Sales at supermarkets fell 4.7 percent, extending a slide that began almost three years ago, the Japan Chain Store Association said.

Americas
Canada - July consumer price index was down 0.3 percent, the first drop since January 2001. When compared with last year the CPI rose 2.6 percent, just under the Bank of Canada's 1 to 3 percent inflation control target range. The Bank bases its policy actions on a core measure of the CPI excluding eight volatile components.

June retail sales fell 0.3 percent offsetting most of the 0.4 percent rise in May. Retail sales were 5.2 percent higher when compared with a year earlier. In constant dollars, retail sales were unchanged in June, after declining 0.2 percent in May. Only furniture and general merchandise rose while clothing store sales sank along with the automotive sector, food stores and drug stores.

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