18 June 2010
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unchanged in April. This suggests that
the US economy will likely continue expanding and be resilient
.The pick-up was on account of a pick-up in average workweek, consumer goods orders, consumer expectationsand money supply as well as smaller declines in the pace of deliveries and building permits. These were, however,offset partially by declines in orders of non-defence capital goods and stock prices. Meanwhile, the leading index’ssix-month annual rate of change softened to 7.9% in May, from +9.4% in April. This was the second consecutivemonth of easing and off the peak of 11.6% in December, suggesting that the
US economy will likely grow ata more moderate pace in the 2H of the year
. This is in line with consensus estimate, which expects US realGDP to expand at a more moderate annualised rate of around 2.9% in 2H 2010, compared with +3.15% in the1H of the year. For the full-year, real GDP is projected to grow by 3.2% in 2010 before easing to +2.92% in2011 and compared with -2.4% in 2009.
Manufacturing Activities In Philadelphia Region Slowed Down In June
Philadelphia Business Outlook Survey’s diffusion index of current general activity fell to 8.0 inJune
, after reaching a recent high of 21.4 in May. The Philadelphia Fed region, which comprises easternPennsylvania, southern New Jersey and Delaware, is more exposed to the auto sector and less influenced byfinancial services and trade than the New York region. This was the first easing in six months, suggesting thatfactory activities expanded at a slower pace during the month, on account of a slowdown in shipments and adecline in average workweek and employment. These were, however, mitigated by a pick-up in new orders,delivery time and inventory as well as a smaller decline in unfilled orders. Input costs moderated and sellingprices fell during the month. Over the next six months, the
future general activity index, however, bouncedback to 40.2 in June
, from 37.0 in May but off the peak of 52.0 in March. This suggests that manufacturingactivities are likely to continue expanding in the months ahead. The pick-up was reflected in higher unfilled ordersand average workweek. These were, however, offset partially by a slowdown in new orders and shipments aswell as a sharper decline in delivery time. As a result, firms indicated that they will likely slow down labourrecruitment and capital spending in the months ahead. Meanwhile, firms expect input costs to ease but sellingprices to pick up in the near term.
The Euroland Economy
Construction Output Fell M-o-m In April
Euroland’s construction output fell by 0.3% mom in April
, after a rebound to +6.5% in March. This wasthe third month of decline in four months, suggesting that construction activities remained weak in the region. Thedecline was due to a drop in building construction activities, which fell by 0.9% mom in April, after rising by 9.2%in March, indicating that private construction activities remained lacklustre during the month. This was, however,mitigated by a pick-up in civil engineering construction activities, which strengthened to 3.4% mom in April, from+0.9% in March, pointing to an improvement in infrastructure spending. Yoy, construction output fell by 6.1% inApril, marginally higher than -6.0% in March and compared with -14.3% in February. This suggests that constructionactivities are improving, albeit gradually, dragged by the sovereign debt crisis in the region.
Singapore’s Non-oil Domestic Exports Slowed Down In May
Singapore’s non-oil domestic exports slowed down to 24.4% yoy in May
, from +30.0% in April andcompared with +25.4% in March. This was the slowest pace of growth in three months, suggesting that globaldemand for
Singapore’s exports has eased somewhat
and as a low base effect gradually wears off. Slowergrowth was reflected in a slowdown in the exports of non-electronic products, which eased to 16.2% yoy in May,from +35.3% in April. This was attributed to a sharper drop in the exports of pharmaceutical products, whichwas mitigated by a pick-up in the exports of petrochemical products. A pick-up in the exports of electronicproducts, which rose by 38.9% yoy in May, compared with +21.2% in April, however, mitigated the slowdown. Thiswas due to stronger growth in the exports of ICs, IC parts, PC parts and disc drives as well as a rebound in theexports of diodes & transistors. In terms of country, the slowdown was due to weaker demand from the US andEurope. These were, however, mitigated by a pick-up in exports to China, Hong Kong, Japan and Taiwan.