Industry Sector Weekly by Lloyds TSB

UK commercial real estate returned to growth in Q3 of 2009, following 8 consecutive quarters of declining values. Nonetheless, according to the latest figures from IPD, the recent growth has only resulted in capital values returning to their 2000 levels. Commercial property growth slows substantially over 2010

UK commercial real estate returned to growth in Q3 of 2009, following 8 consecutive quarters of declining values. Nonetheless, according to the latest figures from IPD, the recent growth has only resulted in capital values returning to their 2000 levels. More significantly, the rate of growth has slowed substantially over 2010, with capital values only growing by 0.2% in the month to July compared to 15% on the year. This moderation has been driven by falling property yields, concerns over future rental growth as well as remaining financing issues. Nordic housing holds up well in global downturn

PMIs single out German Industrial Strength

Preliminary eurozone PMI indices for August, released this week, were lower than expected. The composite index for August was 56.1 versus an expected 56.3, but continued to show healthy expansion remained above the 50 mark in both the manufacturing and services sectors, albeit at a moderating pace. However, two things are becoming abundantly clear about eurozone industry trends for the full year: 1) Germany is a cornerstone to full year corporate performance; 2) German exports from the machinery & equipment, automotive and chemicals sectors will be key to improved potential growth prospects. Recent unexpected strength from the German services PMI, which was 58.5 against an expected 56.3, should not be interpreted as the key source of growth, since the services sector makes up a smaller part of the German economy and is dependent on industry demand.

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