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Opinion

Next week's economics: 22-26 July

Next week's economics: 22-26 July
July 19, 2013
Next week's economics: 22-26 July

If Thursday's first official estimate of second-quarter GDP confirms the NIESR's estimate, it will show that the economy expanded by 0.6 per cent. However, this growth rate is flattered by the fact that output was weak in January, which suggests that growth from now on might be harder to achieve. And the CBI's survey of manufacturers on Wednesday might well corroborate this. It is likely to show that output expectations have fallen recently, due in part to a build up of excess inventories and to a drop in export orders. The survey should also show that investment intentions are still weak, with capital spending held back by uncertainty and weak demand much more than by a lack of finance.

We might, however, get some mildly encouraging news from the eurozone. Flash purchasing managers' surveys could show the index of services activity at its highest level since February 2012, and that of manufacturing at its highest since August 2011. Surveys by Germany's Ifo and the National Bank of Belgium could corroborate this brighter picture.

However, these numbers will still be consistent with output in the region falling; the rate of decline is slowing, rather than the economy recovering. And Thursday's money stock figures from the ECB will remind us that there are still some fundamental problems in the region. These will show that longer-term bank deposits are falling while currency and sight deposits are rising, implying that people are still unwilling to trust their money to banks for any length of time. And they'll show that bank lending to the private sector is falling - although how far this is due to a lack of demand and how far to a lack of supply is unclear.

In the US, the most striking news could be signs of continued growth in the housing market. Although sales of both new and pre-owned houses are likely to have dipped last month, after big rises in May, they could be up by around 30 per cent and 15 per cent, respectively, from last year.

However, this is in part a bounce from a low level, rather than a sign of a general economic boom. Thursday's figures on durable goods orders might give us a picture of the wider economy. These could show a small monthly rise, consistent with the economy growing steadily.