GDP growth in the first quarter was up by 0.5% compared to the final quarter of 2010 and up by 1.8% compared to a year ago. The preliminary estimate is in line with consensus forecasts. Ed Balls, Shadow Chancellor, said: “These figures show an economy that has flatlined since the autumn.” On the other hand, the Chancellor and the Prime Minister were able to claim both the 0.5% and the 1.8% year on year growth represent a positive growth out turn. It is growth and evidence of life but not as we need it for this stage in the recovery.
The Apple product life cycles indicates just how big the iPhone and the iPad will be over the next few years. It took the iPod five years to break the thirty million units per annum mark. The iPhone got there in four and the iPad will make it in year two of launch. As for the Sony Walkman it never made it, it took over ten years to top out, the iPod topped out within eight years of launch. Apple product Life Cycles are moving faster and higher sooner than ever before. for Apple, four years of strong growth are evident from products already in the line up, both the iPhone and the iPad are set to hit the one hundred million units per annum mark in 2012 and 2014. Despite the march of the Androids, the Apple growth story will continue.
The Bank of England is puzzled that theory isn’t working. A depreciation of sterling according should lead to an improvement in the Balance of Payments. Exports are cheaper and imports are more expensive. There should be a reduction in import volumes but the bank noted : “It was puzzling that import growth had remained so robust, despite the substantial depreciation of sterling.In 1983 the UK went into deficit in manufactured goods following the Howe Thatcher pogrom. The trend decline is getting worse not better. Only in one manufacturing sector, chemicals does the UK trade at a surplus the rest is in serial deficit. Devaluation isn’t working but then it never did.
Why did Apple choose the iPod in 2001 and what had happened to Sony and the Walkman. Why hadn’t they made a move? These were the key questions which prompted my case study, Apple from the iPod to the iPad. The staggering revelation was that Apple had utilised classic tools of an analysis to identify the product opportunity. Better still at the launch of the iPod, Steve Jobs spoke in classic three dimensional strategic management analysis. The video clip used when presenting the case study tells all. “Why music”, says Jobs, “because it’s a huge market and no one has got the formula right”. It’s two dimensional Strategic Management.
Blackpool Pleasure Beach, Nickelodeon Land is the new 6 acre area brimming with 14 rides and attractions, a Nickelodeon store, fun game stalls, a huge new restaurant and home to a whole host of famous Nickelodeon characters. New rides include SpongeBob’s Splash Bash, The Rugrats Lost River, the Avatar Airbender, Nickelodeon Streak, Dora’s World Voyage and Diego’s Rainforest Rescue.
In 2010, the UK had a deficit on food of just 1.2% of GDP, add in the bill for raw materials and the deficit amounted to less than 1.5%. Yet the overall deficit on trade in goods amounted to 6.7% of GDP. Since 1983, the UK has been running a persistent deficit on manufactured goods which has compounded the trade deficit problem. In 2010, the trade deficit on manufactured goods amounted to -4.6% of GDP.
The surplus on invisible account could not cover the trade deficit. The overall deficit in goods and services was -3.3% of GDP. In Q4 alone the deficit was -4% of GDP. The situation is worse than 1931, 1948 and 1967. The UK needs a strong banking and financial services sector to offset the manufacturing deficit. This is no time to be bashing the banks.
In 1931 the UK faced a balance of payments crisis and a run on the pound sterling which in the end led to a negation of the Gold peg and the dollar pricing of $4.86. By modern standards the deficit was no big deal. In 1929, the country had a credit balance (current account) of some £100 million falling to £30 million in 1930. In 1931 there was an estimated debit balance of £90 to £120 millions. It was this anticipated deficit on current account that led to a run on Sterling and a repatriation of assets particularly to France and the USA. In Q4 2010, the UK visible deficit was 7% of GDP and the pound traded at $1.56. The current account recorded a deficit of £10.5 billion in the fourth quarter of 2010, equating to 3 per cent of GDP. UK reserves amounted to £40 billion.
The coalition government wish to execute FDI policy with a national agenda. It can make little sense to some in Whitehall to have different regions and sub regions competing for the same international projects with the same taxpayer money. But there is a real danger in developing the national agenda which can lead to an over simplification of activity and this is clearly demonstrated by the statement by the CEO of OCO one of the partners in the FDI programme.
Plenty of good controversial material to draw on in my speech to Pro Manchester at the end of April. It will be looking back at the lessons for monetary policy from the past four to five years and I am looking forward to it.” This was my week-end message from Andrew Sentance, the first hawk on the monetary policy committee to call for an interest rate rise. Andrew will be with us on the 26th April for a members lunch at the Hilton Hotel. Join us from 12:00 until 14:30 for what promises to be a momentous event with significant repercussions for monetary policy. JKA
Revisions to the trade data for Q4 2010 will provide little comfort to those anticipating an improvement in the trade balance. In fact it looks as the visible trade deficit is getting worse and the service sector is flagging in its efforts to offset the visible shortfall. The deficit in goods and services moved to an overall deficit of £15 billion in Q4 as the trade deficit soared to over £25 billion.