The UK economy is overwhelmingly dominated by services – the sector made up 81 per cent of output in 2021. The ‘production industries’, including manufacturing, mining, electricity, water and waste management nowadays make up a much smaller proportion: the manufacturing sector accounts for just 9 per cent of total output and 8 per cent of jobs.
But though the industrial sector constitutes a smaller fraction of the economy, fluctuations in this sector account for a high proportion of the variation in overall economic growth. The sector is highly sensitive to interest rate changes: industrial firms need to borrow for long-term projects, and demand for their products tends to depend more on consumers borrowing to buy them. Research suggests that demand for cars is far more sensitive to interest rates than either demand for services or most of the products sold in the retail sector.
This means that manufacturing and industrial production figures could soon bear the scars of the turmoil that followed SVB’s collapse. Analysts at Capital Economics expect the tensions to “take at least some toll on the wider economy”, and suspect that “further declines in manufacturing activity still lie in store” as a result. The latest industrial production figures are due next Thursday.
MONDAY 10 APRIL
China: Loan growth, M2 money supply
Euro area: Sentix confidence
US: Wholesale inventories
TUESDAY 11 APRIL
China: Inflation, PPI inflation
Euro area: Retail sales
UK: BRC retail sales monitor
WEDNESDAY 12 APRIL
China: FDI
Japan: Bank loans, core machinery orders
US: Inflation, real earnings, Treasury budget, FOMC meeting minutes
THURSDAY 13 APRIL
China: Trade balance
Euro area: Industrial production
UK: Construction output, monthly GDP, industrial production, manufacturing production, trade balance
US: PPI inflation
FRIDAY 14 APRIL
US: Export and import price indices, retail sales, capacity utilisation, industrial production, manufacturing production, business sentiment, Michigan Sentiment (preliminary)
