Economy in Brief

U.K. sales volume for retail sales has been slipping roughly since mid-2024. The 3-month volume index is falling at a 4.4% annual rate over three months. Sales are up at a scant 0.2% annual rate over six months and by 3.5% year-over-year. Passenger car registrations show weakness falling at a 7.6% annual rate over three months, gaining at a 4.6% pave over six months, and then showing contraction at a minor -0.1% rate over 12 months.

Volume Trends Apart from the sequential data, the monthly volume results show a decline in December, a gain in November and a drop in October. The monthly nominal data show small nominal gain in November and December against a sharper nominal decline in October.

U.K. nominal sales QTD relative nominal decline in the fourth quarter with retail sales volumes also show decline dropping at a 2.9% annual rate overall. Passenger car registrations are falling at a 12.4% annual rate in the fourth quarter.

Surveys and Confidence U.K. surveys on retailing for the ‘time of year’ and the ‘volume of orders’ from the Confederation of British Industry (CBI) show sputtering monthly results. The CBI reading for time of year (TOY) and volume of orders (VoO) both show net decline of three months. VoO also falls over six months whereas TOY sales are higher over six months. Both TOY and VoO sales are higher over 12 months. TOY sales are up by 2-index points while VoO sales are up by 28 of their index points. While the year-on-year survey results show short-term agreement, their year-on-year signals seem different. But their long-term ranking results alone again show similarity at the TOY sales log a 21.8 percentile standing vs. VoO that is even weaker at a14-percentile mark. It is an even weaker full-sample standing despite the better 12-month gain. We often see this sort of thing in data comparisons. But if surveys are well-constructed, they usually track but there often are still disparities. That is true here as well and we can nit-pick the details but the overarching message here is that conditions are weak. Consumer confidence from GfK has been volatile over the span but when we rank the confidence index, it stands at 40.5 percentile level, which is stronger than for the surveys but still below its median and barely over half the standing of real retail sales growth.

Rankings/Standings The consumer confidence standing is interesting at 40.5% but it is not ‘close’ to the volume ranking which is at its 77-percentile. The confidence ranking is still slightly below its median. The retail sales ranking is applied to real sales and their 12-month growth rate. The ranking of sales volume is much higher than any ranking registered by CBI surveys or by consumer confidence. Passenger car registrations are weak, too, at a 47.2 percentile standing. In contrast, nominal retail sales have a 60.6 percentile standing. Part of that is the boost they get from the 80.9 percentile standing from the CPI-H, from inflation.

Industrial output in the European Monetary Union continued to struggle. In November, it has advanced (for the headline series excluding construction) for the second month in row. However, a sharp drop in September leaves the three-month change in output falling at a 4.8% annual rate. Output still grows by 0.2% at an annual rate over six months but falls by 1.9% year-over-year. The output path is not draconianly weak, it is not even clearly weakening further, it is simply still challenged, fighting what appears to be still-stiff headwinds.

Manufacturing sector trends- Manufacturing output results are nearly the same as for the headline. Manufacturing sectors show progressive weakening from 12-months, to 6-months, to 3-months for consumer goods output. Both consumer durables and nondurable goods output show sporadic weakens but it is only when they are combined that consumer goods output as a total makes the progressive nature of weakening apparent. Intermediate goods output declines on all horizons from 12-months to 6-months to 3-months, but it is not clearly trending. Capital goods output drops over 12 months and falls even more sharply over three months but manages to make a gain over six months preventing a clear statement about the trend being made.

EMU PMI for MFG- The manufacturing PMI for the EMU is below 50 for each of the last two months and over three months, six months, and 12 months as well.

QTD: Quarter-to-date- Quarter to date IP tracking shows declines in all sectors except capital goods output. Tracking output developments since COVID arrived from January 2020-to-date, output is higher only for overall consumer goods and that is driven only by the component consumer nondurable goods output. However, capital goods output is nearly unchanged on that horizon; the current level of capital goods output is lower than its January 2020 level by only 0.5%.

Growth rankings- The ranking of year-on-year growth rates for November compared to all year-on-year growth rates since early-2007 shows no sector ranking higher than 38%. All rankings are below their median rates of growth over this period. The growth ranking for overall IP and for manufacturing are near their 25th percentiles marking them essentially lower quartile growth results.

Country data The country data for 13 EMU members show four declines in November month-to-month following five with month-to-month declines in October and seven in September. The breadth of weakness on this measure has been diminishing. The country of declining output over 12 months, six months, and three months has been progressively falling as well -another good sign. And the median annualized growth rate has been rising over this span. However, quarter-to-date as of November, there are still seven countries showing output declines in progress with one at unchanged. Output is rising QTD in only five of thirteen EMU nations. However, in terms of growth rankings, there is relatively stronger growth only for the smallest countries in the EMU.

Summing up Growth rankings are above the 50% median mark only for Finland, Greece, Belgium, and Malta. The big four economies Germany, France, Italy, and Spain, each have growth rankings below their respective historic medians with an average ranking of 26.5% - again near the lower quartile border. The EMU area is performing poorly with growth sputtering and weak growth still the order of business across sectors as well as across member nations.