The Week in Review – focus on survey data on manufacturing, services, construction and house prices . Download The Saturday Economist 5th May 2012

House prices were 0.9% lower than last year according to the Nationwide House Price Index for April. Although house prices are below the long term real price trend, the house price to earnings ratio is over five times compared to a long term average of 4.1. No recovery in prices for some time ahead.

The influential Markit/CIPS UK PMI ® series (April)  data were released this week. Manufacturing at 50.5 suggests output is slowing but still in positive territory. Service sector output scored 53.3 with activity, new business and employment all recording growth. Construction output indexed at 55.8, down from 56.7 in the previous month, the latest index was still comfortably above the 50.0 no-change mark. Positive signals in a low growth economy.

From the Bank of England news that narrow money notes and coins increased by 5% in April compared to 5.6% in March. That’s more or less in line with the long run average. Broad money M4 increased by 2.7% having averaged 2% through last year. This is the real problem for the economy – so what happened to all that QE.

What to make of it all? NIESR reduced the forecast for growth to 0.0% for the year. In our comparison of recession and recoveries 1930 – 2012, the current recession is now worse than the 1930s. Output is down by 4% from peak after sixteen quarters. There is no growth strategy and not much of a debt reduction strategy either. It will be a tough year for the economy. JKA. Read the Saturday Economist :  UK recoveries Compared 1930 – 2012

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