Economy, Services, Commodities and Prices-Prices of plywood same as in 2007 |03 July 2009

As importers continue to advertise their latest consignments, it is clear that the prices of plywood keep tumbling. Some prices of this building commodity are now at 2007 levels.

For instance, in 2007 the Bargain Store at Hermitage was selling ½-inch (12mm) plywood at R320 a sheet and ¾-inch (18mm) for R405. G.S. Pillay is now selling at about the same price, ½-inch at R325 and ¾-inch for R415.
 
Better still, the Providence Supplies OJ Enterprise is this week selling at an even cheaper price than the Bargain Store was offering in 2007.

Providence Supplies has this week been advertising ½-inch plywood at R300 and ¾-inch at R400.

In last Friday’s Seychelles Nation, the G.S. Pillay and Company (Pty) Ltd store emerged as the leading competitor for the lowest prices of plywood. The Providence Supplies OJ Enterprise has now taken the lead.

It can be argued from the comparison of prices that the impact of the macro-economic reform programme on costs is no longer a major factor.

Prices rose steeply immediately after the introduction of the reform programme, but now that the rupee has appreciated considerably against major foreign currencies, traders are advertising lower prices.
 
Having prices back at 2007 levels after seven months of economic reform – at least for some imported construction materials – is indeed a big success.

The bigger achievement is the availability of foreign exchange in the banking system for the import of plywood. There are now also more traders in construction materials.
 
Euro zone unemployment up

The unemployment rate across the 16 countries using the euro rose to 9.5% in May from 9.3% in April, data from the Eurostat agency has shown.
It is the highest rate since May 1999. Fifteen million people were out of work, up by 273,000 from April.

In the 27-nation EU, the jobless rate was 8.9%, while the number unemployed rose by 385,000 to 21.5 million.

Spain had the highest unemployment rate at 18.7%. The Netherlands had the lowest rate of 3.2%.

“May's sharp increase in euro zone unemployment demonstrates that the ‘green shoots of recovery’ are not yet showing up in the labour market,” said Martin van Vliet, an economist at ING.

“It would have been higher still if not for the short-time working schemes in some euro zone countries such as Germany and the Netherlands, where recent increases in unemployment have been less severe.”

Short-time working is a system that allows companies to work less for up to six months while their loss of earnings is made up by the government.

UK recovery to be slow

The Organisation for Economic Cooperation and Development (OECD) has warned that the UK’s recovery will be slow, with unemployment rising to 10%.

In its annual health check of the United Kingdom economy, the OECD says more must be done to shore up the banking system.

It also warns that in the long-run, there needs to be a “comprehensive plan to rein back debt to a prudent level”.
 
The financial crisis is likely to lead to a permanent drop in the overall size of the UK economy, the OECD says.
 
Last week, the OECD revised down its short-term outlook for the UK economy to a contraction of -4.3% this year, worse than the government’s forecast of -3.5%.

The report from the group that represents that world’s 30 richest nations gives a comprehensive overview of the problems faced by the UK economy in the past year and outlines some of the key policies that will be needed to restore it to health.

It says that the length and severity of the downturn means that the UK needs to concentrate on improving productivity – especially in the public sector – and do more to retrain unemployed workers.

Commodity briefs from around the world

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• Philippines tender to boost domestic rice inventories

• Thai exporters accuse PM of avoiding rice export issue

• Spanish maize plantings decline year on year

• South African maize drops by maximum daily limit

• US barley plantings second lowest on record this year

• Official figures: Spanish grain production down

• Russian grain handler files complaint over ship delay

• China’s wheat harvest pulls through weather woes

• Brazilian farmers to repay government debt with coffee 

• Costa Rica sees lower coffee exports in June

• Indian coffee shipments down by a fifth

Crude oil prices

As at 02/07/09

Nymex Crude Future       dollars per barrel

Dated Brent Spot             dollars per barrel