Factory output up 0.7%
Factory output surged last month as the pace of motor vehicle assemblies jumped to a six-year high, a hopeful sign for the economy after a slow start to the third quarter. Although another report on Monday showed a slight pullback in factory activity in New York State this month, businesses were upbeat about the future. In addition, gauges of new orders and shipments in the state jumped, all pointing to a pick-up in manufacturing after a speed bump in the spring. Manufacturing production advanced 0.7 percent, the Federal Reserve said. The rise, which more than reversed the prior month’s 0.4 percent drop, helped to lift overall industrial production 0.4 percent. Factory output had lagged solid gains in the Institute for Supply Management’s index of manufacturing activity.
Investor confidence rises
Investment sentiment in Germany rose to its highest level in three-and-a-half years this month amid growing optimism in Europe’s biggest economy, a new survey found yesterday. The widely watched investor confidence index calculated by the ZEW economic institute rose by 7.6 points to 49.6 points this month, the institute said in a statement. That was fractionally higher than analysts’ forecasts for an increase to about 49 points this month, and was the highest level since April 2010. “Financial market experts hold the view that the German economy is still gaining momentum. In particular, the experts’ economic optimism has increased due to the improved economic outlook for the eurozone, although recently released economic data for Germany have fallen short of expectations,” ZEW president Clemens Fuest said.
Home sales up temporarily
The city-state’s jump in private home sales last month was only a temporary reprieve for developers as the government’s cooling measures take root and mortgage rates begin to rise. The city-state’s housing sales climbed 54 percent to 742 last month from July, when they fell to 482, the lowest in almost four years, according to government data. With nine rounds of cooling measures since mid-2009, the increase will be short-lived, according to Mizuho Bank Ltd and UOB Kay Hian Pte. Monthly sales averaged about 1,700 units in the first six months of the year. “There have been successive rounds of measures coming through and with mortgage rates also beginning to move up, you will find that buyers are becoming more circumspect and wondering if these are the right entry levels,” said Singapore-based Mizuho economist Vishnu Varathan, who forecast home prices would fall between 10 percent and 15 percent by 2016.
Philips to buy back shares
Dutch electronics giant Philips is to buy back 1.5 billion euros (US$2 billion) of shares, the company said yesterday, also raising its targets for 2016. The company, increasingly focused on healthcare, said it wanted to push ahead with its restructuring program, including through job cuts. Philips chief executive Frans van Houten declined to say how many jobs were concerned. Philips said it wanted to increase its comparable sales growth by an average of between 4 and 6 percent a year to 2016, and raise earnings before interest, tax and amortization margins to between 11 and 12 percent, particularly thanks to its healthcare business. The Eindhoven-based company said its share buyback program would start next month and “conclude in the next two or three years.”