The CBI said: "All signs in this survey point to
the manufacturing sector going from strength-to-strength."
Increased demand at home and abroad was behind the
improvement — with the export orders balance standing at minus 3, up
from minus 9 in April.
The figure, the best since February 1996, was also
helped by a weakening of the pound over the past month.
Declining stocks and increasing demand have also
resulted in sector expectations of increased production — with output
expectations at their strongest level since May 1999.
Only the textiles and motor vehicle sectors expect
output to slip — while metal manufacturers and electrical engineers have
forecast the sharpest rises.
"Strong consumer spending fuelled by low
unemployment, rising take home pay, willingness to borrow and a strong
housing market — is driving the economy," said the CBI.
But the organisation said rising oil prices and
financial market instability could impact on the rosy outlook.
ASIAN DEMAND LIFTS JAPAN'S TRADE
Japan's trade surplus in April leapt 30.3% on a year
ago, powered by exports to Asia, where demand for steel and electronic
goods is high.
Japan's surplus on trade in goods for April rose for
the tenth month in a row to 1.07 trillion yen ($9.63bn), the Finance
Japan's trade surplus with Asia grew 62.6% in April,
whereas its surplus with the US shrank 2.4%.
Overall, the trade data is yet another sign of healthy
growth in Japan.
Japan, the world's second-biggest economy, has beaten
forecasts by growing 1.4% in the first quarter of 2004.
Export growth has helped the domestic economy as the
feel-good factor has spilled over into business and consumer spending.
"The brisk exports of digital and steel products
to Asia contributed to the high levels of trade surplus in Asia," a
Finance Ministry official said.
The stronger yen and changes in the auto industry were
behind Japan's declining trade surplus with the US, with car exports
dropping nearly 15% from levels seen in April last year.
"Japanese automakers are shifting production
overseas," said Shuji Shirota, an economist at Dresdner Kleinwort
Japanese exports to the US fell 2.4%, as did imports
from the US.
Japan's trade surplus with the EU rose 1.6% to 275.2bn
yen, with both exports and imports rising more than 3%.
In Asia, Japan had a trade deficit with China, though
this shrank 2.6% to 203.5bn yen, and trade surpluses with South Korea,
Singapore and Taiwan.
HUNDREDS DEAD IN HAITI FLOOD TOWN
As many as 1,000 people are feared dead in a remote
Haitian town left submerged by disastrous floods.
About 300 bodies have been found so far in the
south-eastern town of Mapou, which was described as "a lake".
Rescue workers are moving to try to help thousands of
survivors who may have lost relatives, their homes and access to clean
water and food.
Disinfectant is to be sprayed in the nearby Dominican
Republic town of Jimani to stop the spread of disease.
More than 900 people have been confirmed dead from the
floods across Haiti and the Dominican Republic which make up the Caribbean
island of Hispaniola.
Two teams of United Nations disaster relief experts
will set off for the island.
Aid workers are scrambling to get chlorine tablets and
first-aid kits to Mapou and other stricken towns, helped by US-led
The multinational forces were sent to Haiti to help
keep order after the February overthrow of President Jean-Bertrand
Three helicopters carrying water, chlorine purification
tablets and other supplies have been sent to Mapou and Fond Verettes,
where 165 people are said to have died.
Another 100 bodies have been found in the coastal town
of Grand Gosier.
"Mapou is in the middle of a valley and the
village is practically under water," spokesman Lieutenant Colonel
David Lapan told Reuters news agency.
"It is like a lake when you look at it from the
MANUFACTURING BOOSTS SOUTH AFRICA
South Africa's economy expanded at an annual rate of
3.1% in the first quarter of 2004.
The gain was the result of a sharp upsurge in
manufacturing, coming out of a long recession which had been exacerbated
by the strong rand.
Agriculture also began to recover from a lengthy
drought, which had seen the sector shrink 9.5% in the previous quarter.
The growth marks a turnaround from the 1.3% registered
at the end of 2003.
SOUTH KOREA OUTPUT SLOWS DOWN
South Korea's industrial output grew a
less-than-expected 11.3% in April because of weak domestic spending,
officials have said.
Growth was led by the semi-conductor industry whose
production climbed 62% year-on-year.
But car manufacturing grew only 2.9% due to lower
domestic demand for cars.
"Production maintained growth momentum on strong
exports, while investment and consumption remained sluggish," the
National Statistical Office said.
Consumers have not been spending because of debt
worries, analysts said.
Growth, which amounted to 11.6% in March, had been
expected to rise to 12.4% last month.
PHILIPPINES ECONOMY RACES AHEAD
The Philippines economy grew at its fastest rate in
five years in the first quarter of 2004, as farming output and consumer
spending rose, officials said.
The rise in GDP — up a seasonally adjusted 2.2% from
the fourth quarter — led the government to retain a forecast of 5.8%
growth for the year.
This is despite high oil prices, which will hit a
country where almost all of its energy requirements are imported.
Officials warned high oil costs could mean inflation reaches 5% in 2004.
INDIA GOES COOL ON PRIVATISATION
India's new government has scrapped key elements of its
predecessor's privatisation programme. The communist-backed coalition, led
by the Congress party, said in a policy statement that it would not sell
off profitable state-run firms. Privatisations of loss-making firms would
be decided "case-by-case".
Earlier, Indian share prices posted a near-record slump
amid fears that the new coalition would reverse the BJP government's
The prospect of slower progress on reform has also
spooked foreign investors, who have sold some $800m worth of Indian shares
so far this month.
BRAZIL AND CHINA UNITE ON TRADE
China and Brazil have pledged to widen collaboration in
world trade talks.
The two countries are already members of the G20 bloc
of developing states, designed to counter US and European bargaining power
In a statement issued in Beijing, the two said they
would work to ensure the World Trade Organisation's negotiations
"reflected everyone's interests".
Brazil's President, Luiz Inacio Lula da Silva, is in
China to heighten economic links between the countries.
The two countries are among the main protagonists in
the G20's efforts to make world trade talks more beneficial to developing
countries, not least the grouping's defeat of EU and US proposals in
Cancun in 2003.
Brazil and China already have a strong trading
relationship, worth $8bn in 2003 and more than five times the level of
JAPAN'S BANKS BACK IN THE BLACK
Japan's financial sector marked a return to health last
week as most of the country's biggest banks looked set to make it back to
Of the top seven banks, Mizuho the world's largest bank
by assets — and four others all reported solid figures.
Mizuho's 407bn yen profit ($3.6bn; $2bn) followed a 2.4
trillion yen loss in 2002-3.
But UFJ, the number four "megabank" in Japan,
said it had made a loss as heavy bad debts continued to weigh it down.
UFJ reported a loss of 402.8bn yen, making three
straight years of losses.
Its bad debts rose to 3.95 trillion yen, up 6.5% in six
months, and its president has announced he will resign.
And Resona Holdings, the fifth-biggest bank, also
recorded heavy losses as its efforts to clean up its balance sheet ate
into its bottom line.
Resona, effectively nationalised in 2003 as its
bad-debt losses mounted, said losses doubled in the year to March 2004 to
1.66 trillion yen.
KERRY ATTACKS BUSH FOREIGN POLICY
Democratic White House challenger John Kerry has
pledged that if elected president, he would build new alliances around the
world to fight terrorism.
In a major speech on national security in Seattle, Mr
Kerry said his top priority would be preventing terrorists from
"gaining weapons of mass murder".
Attacking President Bush's decision to go to war with
Iraq, he vowed to work with other nations on key issues. Mr Bush's
campaign spokesman dismissed the speech as political rhetoric.
CUBA AND MEXICO MOVE TO MEND TIES
Cuba and Mexico are to return their respective
ambassadors to try to mend relations strained earlier this month.
Mexico, once Cuba's strongest ally in Latin America,
accused Havana of interfering in its affairs and pulled out its envoy on 2
May. Cuba responded by doing the same with its ambassador in Mexico City.
TRADE 'NOT EASING' POOR'S PLIGHT
The world's least developed nations are not benefiting
as they should from globalisation, a UN report says.
Although poorer nations were showing encouraging signs
of growth, their populations were not seeing the advantages of it, the
It says poverty remains a mass phenomenon, and
international trade — which should contribute to poverty reduction —
has not really done so. The report was issued by the UN Conference on
Trade and Development.
TELEGRAPH SALE GETS THE GO-AHEAD
Hollinger International, the publisher of the Daily
Telegraph and its stable mates, has cleared the way for the sale of the
newspapers to proceed.
The company said its board had decided to focus on the
UK properties, rather than sell the group as a whole.
At least four bidders are after the Daily and Sunday
Telegraph and the Spectator magazine.
MYTRAVEL NARROWS LOSSES
Holiday firm MyTravel has managed to cut its losses —
but warned it is still battling tough market conditions.
The firm revealed it had narrowed its pre-tax loss to
£199.6m ($364.5m) for the six months of the year, from £617.9m for the
same period in 2003.
PEOPLESOFT SPURNS TAKEOVER OFFER
Business software group PeopleSoft has rejected the
latest takeover offer from US rival Oracle. California-based PeopleSoft
described Oracle's lowered hostile bid for the company as
Oracle dropped its cash offer by 19% earlier this
month, to $7.7bn (£4.2bn), following a decline in PeopleSoft's share
Peoplesoft's board has already rejected three previous
Oracle bids, including one offer at $9.4bn.
SHARES WARM TO INDIA FINANCE TEAM
India's stock markets have given a warm welcome to the
finance minister chosen by the Congress Party-led government.
The appointment of Palaniappan Chidambaram, who served
in the same post from 1996 to 1998, saw the Bombay Sensex index rise 3.2%
Mr Chidambaram, a graduate of Harvard Business School,
reformed and cut taxes during his previous term.
CONSUMERS SHRUG OFF UK RATE RISE
The Bank of England's latest interest rate rise has
done little to sway UK consumer confidence, despite warnings that purse
strings must be tightened.
According to the latest survey from Martin Hamblin GfK,
consumer confidence was unchanged at minus 2 during May.
This was one point higher than in the same period last
year and above the annual average.
RETAIL WOES HIT JAPAN'S RECOVERY
A surprise dip in retail sales has raised questions
about the strength of the Japanese economic recovery.
Official figures show that the retail sector's takings
fell by 1% on the month in April, and by 0.8% compared with the same
period last year.
The data wrong-footed forecasters, who had predicted a
year-on-year decline of just 0.2%.
The figures contradicted recent signs that strong
export sales were feeding through to increased consumer demand.
EUROPEAN RETAILERS BET ON CHINA
German retailer and distributor Metro and UK
supermarket chain Tesco are both looking to expand in China.
The German retail giant plans to open 10 more stores in
China this year, and another 40 within five years.
Meanwhile, Tesco chief executive Terry Leahy said the
firm plans to open stores in China and across Asia.
Retailers regard China — which saw 9% growth last
year and has a population of 1.3 billion people — as offering huge
NO SLOWDOWN IN UK HOUSING MARKET
The UK's housing boom is showing no signs of weakening,
according to the Nationwide building society.
The mortgage lender has now admitted there is a risk
its forecast of 15% price growth this year may be too low.
Its latest survey showed house prices rose by 1.9% in
May, compared with a 2.1% increase in April.
The rise meant annual house price inflation hit 19.5%
— the highest level since May last year. The average house now costs
£149,020, Nationwide said.
BRUSSELS OBJECTS TO SONY-BMG DEAL
Music giants Sony and BMG have two weeks to respond to
objections from the European Union about their plans for a merger.
Brussels' objections to the deal remain confidential,
but are understood to centre on market share. Combined, the two would
rival Universal for top spot in the $30bn industry.
ALSTOM LOSSES ACCOMPANY EU DEAL
Alstom has unveiled the details of a rescue plan which
could pump as much as 2.5bn euros ($2.2bn; £1.2bn) into the troubled
French engineering company.
The company is trying to repair itself after a string
of business disasters.
At the same time, the firm announced a loss of 1.84bn
euros for 2003, much bigger than analysts had predicted.
PROPERTY 'CAN'T REPLACE PENSION'
Britons hoping their homes will provide an alternative
nest-egg to a pension are mistaken, a report has said.
Rather than choosing property or pensions, most people
— even in wealthy areas — will need both, the Pensions Policy
Institute (PPI) has said.
While pensions have suffered and house prices have
boomed, the PPI says pensions are better in the long term.
Pension funds have risen by an average of 11.6% a year
since 1970, while homes have grown by 11.1% a year, PPI said.
One-in-eight of all working people expect property to
be the main source of retirement income. Yet property is unlikely to
deliver the returns for all but the very wealthy, said PPI.
AFRICA REGAINS GROWTH TRAJECTORY
Africa's growth picked up in 2003 after a rough 2002, a
survey has found.
Rising commodity prices and peace talks in several war
zones helped turn things around, said the Organisation for Economic
Co-operation and Development.
According to the OECD's African Economic Outlook (AEO),
growth was 3.6% in 2003, back to the long-run average after a dip to 2.7%
But the figures still leave Africa far off the rate
needed for poverty reduction, the report's authors warn.
The Millennium Development Goals set by the United
Nations call for a halving of economic poverty levels to 23% of Africans
in 2015 from 46% in 1990.
MORTGAGE LENDING CONTINUES BOOM
The UK's appetite for mortgage debt continued rising in
April, but existing borrowers showed growing caution.
Mortgage lending in April totalled £25bn — 25%
higher than the same month last year and 1% more than March, the Council
of Mortgage Lenders (CML) said.
But there was a marked drop in people mortgaging to
release cash from their property or to get a better rate.
Remortgaging slowed to 33% of the total market, the
lowest level since September 2002.
At £9.2bn the value of remortgaging fell from £10.1bn
in March, and was 5% lower than last April's figure of £9.7bn. Then it
accounted for 49% of new lending.
PUTIN PUSHES FOR URGENT BOOST IN EXPORT CAPACITY
Russian President Vladimir Putin said last week
ministers must approve new crude oil export routes faster, criticising
officials for taking years to rubber stamp plans for new pipelines.
Output in the world's second largest oil exporter has
boomed over the past five years and an export boost could help world
consumers diversify away from Middle East suppliers — a key target of
global powerhouse the United States.
But Russia's main export routes are running at
capacity, making it difficult for Moscow to cash in on record oil prices.
"The government has been unable to determine its
priorities for some time, while this issue should have been solved a long
time ago," Putin told both houses of parliament in his annual state
of the nation address.
Russian output hit a post-Soviet high of 9.01 million
barrels per day in April, outpacing the most optimistic official growth
forecasts of seven percent for the year.
GASUNIE PUSHES AHEAD WITH PIPELINE TO UK
Dutch gas company Gasunie is pressing ahead with plans
to build a 500-million euro ($606 million) pipeline to Britain after the
European Commission agreed the project should be exempt from rules on
Former state monopoly Gasunie said the pipeline would
be ready to pump gas to Britain by the end of 2006, placing it ahead of
several other projects to supply the UK, which needs new sources of the
fuel to replace its dwindling North Sea reserves.
Gasunie said it decided to go ahead with the project
after the European Commission granted the pipeline an exemption from
forthcoming laws forcing pipeline operators to allow other companies to
use their facilities.