Comments: A new locomotive for global growth


The problem with Miles report, is it takes 1996 as it's base and the say 60% of the house price movements can be explained.

The he goes on to say, that therefore 40% is due to "speculation", and therefore when this stops prices will fall.

However, this is a bit of a "all cats have four legs, my dog has four legs, therefore my dog is a cat" arguement, becuase he fails to show that house prices were correctly valued in 1996. Could it be that house prices were cheap in 1996, because of the "speculation" that house prices would fall further?

Posted by kingofnowhere at November 27, 2006 08:36 AM

Hi David,

New economic growth locomotive, it, very nice concept!
I have enclosed a link counter simulating the US Trade deficit, i found it runs remarkably true!

Could anyone run similar models for UK Plc and EURO bloc?
we might be able to deduct some actual information that is fact rather than assumption or vague speculation.


Arik Schickendantz

Posted by Arik Schickendantz at November 27, 2006 02:28 PM


I just googled the third quarter US growth rate. According to my search from a release of the Bureau of Economic Analysis, the US third quarter growth rate was 1.6%, not great but not .04% either. Did I miss something?

Posted by Gary Bezowsky at November 27, 2006 08:46 PM

No, you didn't miss anything. The convention here is to report the rise in GDP on the quarter as a straight percentage change, while the convention on your side of the pond is to annualize it. So 0.4% and 1.6% (0.4% times four) are identical.

Posted by David Smith at November 27, 2006 09:14 PM

Very good. Thanks for the input!

Posted by Gary Bezowsky at November 27, 2006 09:30 PM


Export order at highest level since 1995 doesn't say much really, does it? Given the growth in world trade in the intervening years, it only tells you that export orders have been terrible since 1995, not that they are good now. I hardly think firms will be celebrating.

Posted by HJ at November 29, 2006 08:54 PM

That's not the way these figures work. They're "balance" figures, which show the level of export orders in relation to what businesses regard as normal. It doesn't mean there has been no growth in exports in the intervening period. The volume of exports rose by just under 50% between 1995 and 2005. In 1995 firms were still benefiting from sterling's post-ERM devaluation.

Posted by David Smith at November 29, 2006 11:11 PM


Having just looked up the figures on the ONS web site, I accept what you say.

However, in that case, your article was misleading because you wrote "...lifted industry's export orders to their best level since August 1995" which implied that August 1995 was the previous high, which it was not. You gave no indication that you were not talking about actual levels, so I took you literally.

The Guardian had an article a year or two back where it talked about a "record level of manufacturing output". When I investigated, it turned out that it meant a record upturn in orders, but this was from a level much lower than a year before. It was not a record level at all. They did publish a correction on their web site, although not in the printed version.

Posted by HJ at November 30, 2006 10:55 AM

If I'd written that exports were at their best since 1995, yes, but orders and order books are a rather different concept. But I'm sorry if you were misled. Here's the start of the CBI's release:


A surprise surge in overseas demand for UK manufacturing goods has lifted export order books to their highest level since 1995, according to the CBIís latest monthly industrial trends survey published today (Tuesday).

The balance of manufacturers reporting export orders to be Ďabove normalí was three per cent, the first positive balance since February 1996 and the highest level since August 1995 (+7%). This represents a marked improvement from Octoberís balance of minus 11 per cent.

Total order books also improved, regarded as 'below normal' by a balance of minus six per cent, up from minus 20 per cent in October, and more in line with the levels of August and September. All major sectors saw an improvement in total orders, with the capital goods sector the strongest and consumer goods the weakest.

Posted by David Smith at November 30, 2006 03:41 PM