Final (Economics.enigneering Sector)

8/6/2019 Final (Economics.enigneering Sector)

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Vulnerability of two Engineering Sectors to shocks,

exchange rates and commodity prices

ContentsContents ..................................................................................................................... 1

Abstract ...................................................................................................................... 2

Chapter one: Introduction ........................................................................................... 3

Chapter Two: Literature Review ................................................................................. 8

Chapter Three: Research Methodology ..................................................................... 17

Chapter Four: Data Analysis ..................................................................................... 214.2 Mechanical Engineering Sector of the United Kingdom (measured by

manufacturing sectors output) ............................................................................. 23

Exchange rates and aggregate demand ............................................................... 27

Chapter Five: Conclusion .......................................................................................... 34

Bibliography ............................................................................................................. 36

Appendix A: Oil Prices ............................................................................................... 39

Appendix B: Steel Prices ........................................................................................... 68


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Abstract

Engineering sectors of a country contribute in the economy to a great extent.

The sector of engineering in United Kingdom is making the 5th part of the

overall economy of the Great Britain. It makes approximately 20% of the

entire GDP. As the engineering is the basis of many other sectors

development like in technology, research and development. The primary

resources for the generation of facilities are scarce and regulated the

manufacturing of other things used in the society. This research paper

focuses on the civil engineering and the manufacturing sectors and proves

their vulnerability to the demand and supply shocks, exchange rates, and the

commodity prices. The overall goal of this paper is to study the effects of

these economic concepts on these two sectors. Eventually the economys of

United Kingdom in terms of growth and stability is being affected.


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The background of the vulnerability of these two sectors, towards the shock

and eventually exchange rates and commodity prices is very crucial to the

understanding of the current economy decline. The most common topic in

talk shows, newspapers and magazines is current financial crisis of United

Kingdom. The recession of 2007 lay off thousands of employees. The start of

the recession was directly caused by the construction businesses as the

investors invested heavily in USA but little did they knew about the

approaching negative mood of the economy.

People took home loans and the banks lent them money. This increased the

demand of houses and the prices increased too. With more money in the

banks, the loan agents thought they should expand the money borrowers listand widen their loan disbursement reach. The over confidence made them

relax the conditions of the loan. This caused the relaxation to the people to

repay the loans. The whole situation went interconnected with the banks and

the overall world economic conditions. The recession started because of

delayed interest payments. USA, United Kingdom and most of the European

countries got badly struck by recession. The vulnerability of civil engineering

increased because the constructions businesses had to stop instantly. The

eventual affects were obvious at the commodity prices like oil and the

overall inflation of the other products in the market. As the middle east

increased the prices of the petroleum the whole world as purchaser of

petroleum from them were affected. This increased the fuel rate for the

manufacturing industry. The push of recession was faced by the whole world.

The manufacturing industry sector was struck with the recession after

effects. The overall commodity prices were revised and the basic fuel

petroleum for the industry machinery was facing the max global crises. The

recession took over the overall economy of United Kingdom and the crises

were unexpected. The whole of the EU faced these unwelcoming economic

turns.


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phenomenon is recession triggering. The GDP of Britain had been fluctuating

with a variable speed.

The GDP; Gross Domestic Product, of United Kingdom may fall with the

shrinkage and may cause the recurrence of the double dip. This double dipwill cause the shares to go down directly affecting the businesses. The

commodities prices like steel and petroleum are subjected to the

government intervention. The best policies formulation by the economists is

the fundamental requirement at this point.

With all of these economic imbalances United Kingdom is struggling with the

recession and pulling out of it. Without the faster reaction to the exchange

rates and the shocks, the recession will be worsening. It could get worse

than the recession after the World War 2.


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Chapter Two: Literature Review

The engineering sectors are the builders of a country and improve their

development. The economy of the country is directly related to the success

and failure of the engineering sector in achieving their goals as the

government allocates a lot of funds for the research and developments in the

annual budget. The scientific sectors and the manufacturing sectors of the

business are interlinked through a lot of ways. This interlinking is shown

through their impacts on the overall economy of a country.

The sixth largest economy of the world is owned by United Kingdom. Most

the energy demands are covered by the petroleum and gas. The industrial

sector is completely dependent on these to fulfill their fuel requirements.

United Kingdom civil engineering sector makes the second largest in Europe.

It employs more than 2.1 million people. The constructions make the 8.2% of

GVA. The manufacturing engineering inputs a great contribution of 75% of

R&D businesses in the economy (Excellis 2009).

Recent news at Sky, indicate that there are more drastic effects of the

recession on the civil engineering industry. The same trend has been

observed in the manufacturing engineering sector. According to a research

during 1970s 7% of the employment fall was observed in Britian. (Ajit 1977).

The shocks in constructions business affect the overall civil engineering

sector and jeopardize the development. It casts a negative impact on the

exports too (Guillaumont, Jeanneney et al. 2004). The recession in the United

Kingdom affected the civil and manufacturing engineering and hampered the

business causing shocks. The society was affected by the increased

unemployment in the engineering firms. The increase in demand of the

highly skilled professionals is another reason for the shocks produced in the


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economy of United Kingdom. The manufacturing and civil engineering sector

requires the proficient employees to work well (Ajit 1977).

The United Kingdom manufacturing engineering sector has become very

diverse over the years. There has been an increasing expertise and the jobsavailability. The jobs in Sales, R&D, post production jobs, and operations are

diverse than those before. The more skilled labor is required to fill these job

posts. The manufacturing sectors remain vulnerable to the global downturn.

This is causing the varying trend in the manufacturing purchasing index. The

domestic and export prices are falling. The investors are putting fewer

shares in the market. United Kingdom has invested in last twenty years in

2% of the GDP. Eventually the GDP of the in 2003 was 1.9% as compared tothe GDP of 1983 which was 2.2%. The future targets are high to achieve

2.5% GDP by investments (Excellis 2009).

Commodities are the raw material or semi processed things such as cotton,

oil, gas, coal and other minerals. These are the major exports of the

developing countries. The exports of these commodities have a deep impact

on the economies of the countries exporting and importing them. These

commodities prices fluctuate with the globalization and liberalization. Africaearns 90% of its exports earnings from commodities (Solignac-Lecomte

2003).

Lack of investment in United Kingdom manufacturing engineering sector has

lead to industrial crisis in Britain holistically. This is increasing the gap of

productivity between United Kingdom and most of its industrial rivals. There

is an increasing trend of rapidly growing services sector putting the

manufacturing graph down. The government has to offer some subsidies to

the manufacturing sector to bring it to the surface from the depths of

recession (EAMA 2007).


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The exchange rates are eliminated within the Europe due to the Economic

and Monetary Union. The exchange rate volatility brings about the

macroeconomic cost and its absence is like a benefit. This exchange rate

plays a significant role in the adjustment but is also incorporates the

arbitrary disruptive element role for the rest of the EU than Britain (Currie,

Britain et al. 1997). In the long run the relationship between inflation and

exchange rate movements is absolutely unsubstantiated.

The trade is directly affected by the exchange rates of pounds through

adjustment costs and uncertainty. The indirect effects are more significant.

The degree of competitiveness depends upon the exchange rate volatility on

trade prices. The exporters are willing to bear the risk the prices will raise,but if importer are willing to bear the risk, then the prices fall (Ct 1994).

The manufacturing sector has been outsourcing a lot of commodities. The

raw material obtainment from the trusted suppliers at regular basis and at

suitable prices is a big achievement of the manufacturing businesses. Over

the years, it has become a routine for most of the manufacturer engineers.

Nowadays, the value adding functions like Information technology and other

machinery is useful. This way manufacturing sector has been bidding on theprices of the commodities and they are prevailing in particular geographic

areas (McCarthy and Anagnostou 2004).

The United Kingdom manufacturing industry faced the economic recession

during 1970s. During the 1980s there was a long-drawn-out period of

expansion. During this persistent time, the United Kingdom manufacturing

market lost its shares in its domestic and world markets. The GVA fell from

26.5% to 18.8%. A positive change was the increase in job market in the

manufacturing sector. The manufacturing industry being the customer of

service industry added to a substantial level in the GDP of United Kingdom

(McCarthy and Anagnostou 2004).


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The commodities prices show sharp challenges by showing clear fluctuations

and long run trend movements. The key feature of volatility of the

commodity prices is useful information for the policy makers. The duration

and peaks of commodity price cycles act as the key inputs to steady the

macro effects of earning. The commodity exporting countries like most of the

developing countries take the volatile commodity price as the significant

policy issue (Cashin and McDermott 2002).

Shocks that produce the variations and fluctuation in the commodity prices

can exhibit untrustworthy degree of perseverance across commodities

(Cuddington and Liang 2000).

If the commodity prices shift after the decline from its peak then this means

that the prices have moved from boom to slump (Cashin and McDermott

2002). The rise in volatility of the early 1900s was due to greater amplitude

of prices movements. The rapid movements of the prices can cause some

serious consequences to the economy especially to the real income, trade

terms and conditions, and fiscal dependant countries. There are

philosophical implications for the macroeconomic stabilization (Cashin and

McDermott 2002).

The exchange rate and inflation do not conform directly to the fiscal policy

rules. These sometimes work much worse than imagination from the

recovering from the inflation. It has direct and indirect effects on exchange

rates. The indirect effect is beneficial because it triggers less fluctuation in

the interest rates (Taylor 2001). The appreciation of the exchange will cause

lower GDP. The decline in the output will result in lower inflation. The

performance improvements are also directly related to the exchange rates.

Civil engineering or the constructions business is directly affecting a lot of

other business and economic activities. The construction demand may

change with real interest rate, gross national product and unemployment.


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The nature of investment determines the latent pointer for change in

demand (Akintoye and Skitmore 1994).

The investment in the constructions sector causes expansion which means

the economic growth. This is because the construction has the multipliereffect on the economy of United Kingdom. This expansion may be growth

initiating and/or growth dependent. Construction; in the developed countries,

act as the growth dependent, because it makes investment a consequent

demand. United Kingdom has recently been showing the rising trend

private sector commercial construction whereas, there is a considerable

decline in the public sector housing, nowadays (Arku 2006).

The recession during 1980-1984 in United Kingdom, set foot for the

increased demand in the construction for the private commercial sector. This

sudden demand was caused by the lowering of the mortgages interest rates

and the tax savings. These interest rates and the general business assurance

have a overwhelming bearing on private sector workload (Dove 1991).

There is a general attitude of construction investors in constructing school,

roads, hospitals and prisons for the public welfare. The financial investors are

paying the government to support these public welfare projects, where the

government pays them the interest on this investment. The private sector

development shares a positive inelastic relationship with the GNP. This is a

derived demand emanating from the customers or the firms (Akintoye and

Skitmore 1994).

The manufacturing sector of United Kingdom is directly correlated to the

constructions sector in the private sector development terms. Recently, the

houses prices in London are considerably low as compared to the houses

prices before the recession of 2007. The real interest rates have a negative

impact on the residential investment over long time period (Akintoye and

Skitmore 1994). These trends have been explained by the manufacturing

profitability and economic conditions.


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The manufacturing and civil engineering are quite related when it comes to

witness their effects on the economy. The United Kingdom economy has

been enjoying a stable graph to the idealistic conditions. The variations

caused by the recession were shaky. The effects of recession brought a

change in the prices of houses. The effects of recession were drastic on the

pounds exchange rate. With the fall in construction business after recession,

the pound depreciated from Euro.

The shocks to economy, demand for manufacturing goods, and new

government policies and demand of goods are the leading indicators of

construction demand (Hillbrandt 1985).

The construction material, the manufacturing goods, the commodity prices

are all environmental variables. The suppliers to material and raw material

bargain on the prices of the commodity they are supplying. The good rate is

set according to the good negotiation skill owned by either of the parties.

The British manufacturing industry is contracting since last four years. If this

goes on like this, then 15% of the manufacturing industry will have to be

compromised. Two million employees would have been laid off. During 1970-

1974, there was down fall of 7% in the employment at the manufacturing

sector. That time each year, 180,000 people were being laid off. The net

contraction of the manufacturing sector was as drastic as 120,000 (Ajit

1977).

The economy stability of United Kingdom has been exemplary. Over the last

five years, the economic recession flattened a lot of businesses and the

employment situation. The constructions businesses were the most affected.

Most of the construction companies wound up because this was the only way

left. The trade with other competitor countries, slowed down. It was the

recession, but the last year December heavy snowfall also hampered the

mobility on roads to the extent that many businesses remained closed for

days. 10% of the sales at the petrol stations were declined (Reuben 2011).


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It was not only United Kingdom that faced the recession after effects but it

was faced by the whole world. The developed countries had the worst

outcomes. The developing countries also got the adverse effects. The

economies of the whole world are still struggling to overcome the

unemployment and the other economic gaps that will take time. The slow

and steady efforts towards the recovering and generating the new job posts

for the unemployed and laid off is the optimum goal of the government

nowadays.

The literature review of the United Kingdom manufacturing engineering and

civil engineering sectors has been spotlighting the concepts of demand and

supply shocks, exchange rates and the commodity prices to the economy ofUnited Kingdom. The GDP has declining effect. The interest rates are

increasing. The manufacturing sector and civil engineering sectors are both

interlinked to an un-ignorable level. The construction industry has been

booming in private sector and declining in public sector. This means that the

private investors are willing to take the construction responsibilities of the

United Kingdom. The railway tracks and parks are the innovative investment

places for the construction (Akintoye and Skitmore 1994).

The GBP exchange rates change when there is news in the underlying

fundamentals. The empirical evidences show that this exchange rate

remains disconnected in most cases from these core fundamentals (De

Grauwe, Dieci et al. 2005). The volatility of the exchange rates surpass the

other affecting economic variables when they are volatile (Baxter 1991). The

equilibrium of the exchange rates is possible but is a very rare condition. It

occurs only when other fundamental variables become considerably small

(De Grauwe, Dieci et al. 2005).

The adverse effects of recession on the construction sector have been

putting the construction businesses under the surface even in 2011. The first

quarter of 2011 was not very good for the business. Howard Archer if HIS


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Global insight, says that there are added to the growth concerns. He is

hopeful that the first quarter output statistics will possibly be revisable and

growing in the second quarter (Wearden 2011).

The United Kingdom public is concerned about their money in the banks andthe monitory decisions. There was a campaign with 7000 participants,

covered by the sky news. In the sky news latest periodical, Tony Woodley;

the joint leader of united shared with the sky reporters that What we need

is the Government to make sure that some of that money, our money, thats

gone into banks comes out into small, medium and large businesses (sky

2011).

The economy of United Kingdom is facing the aftermath of the recession. The

economy in terms of shocks, exchange rates and commodity prices are

making civil engineering and manufacturing engineering vulnerable to these

changes.


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Chapter Three: Research Methodology

This research is based on the researchers ability to conduct an efficient

research and to be able to figure out which data is important for the research

project and which is irrelevant. Then again, finding out the right data is a

challenging task given that the period selected for the task is 1997, 2002

and 2007. The official data was sometimes beyond access and therefore very

difficult to find. The aspect of data collection will be analyzed in the

limitations of the research. The research methodology portion as a whole is

going to describe the methods which were employed for the conduction of

this report. Because of the challenging nature of the data, it was very

important that the research methodology was carefully crafted out and that

it be described as efficiently as possible to the reader. This section then

serves precisely that purpose.

2.1 Research Design

The design for this research was a mixed approach meanings to say that

both a secondary data collection and a primary data collection was

conducted. Also, both a quantitative and a qualitative approach were

employed to fully analyze the collected data. The results have been shown in

graphical formats for better analysis and the analysis has been presented in

chapter three of the research report.

2.2 Primary Data collection

For the primary data collection, three variables were of focus.

i) UK pound to US dollar exchange rate for the period 1995 to 2009

ii) The commodity prices for steel (hot rolled steel) and oil (WTI crude oil)

for the period 1995 to 2009


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Moreover, the reading and the analysis of the secondary data is to tell the

researcher about the dimensions of research that have already been

covered, and thus to avoid repeating the same analysis by taking the same

route of collection and interpretation.

For this particular research, the secondary research focused on the economic

shocks, demand and supply, the dynamics, the concepts and the impacts of

the exchange rates and the concept and impact of the commodity prices on

the economy as a whole, in general terms and on manufacturing and

construction sector specifically. Thus, a qualitative and a theoretical study of

impacts of the independent variables on the dependant variable were

conducted through this.

The resources for the secondary research were mainly books and journals

available online. Web links and articles published on random websites were

completely avoided lest the report ended up including unreliable and

incredible information and data.

The books and journals used were accessed online because of the ease of

finding the required books with the correct and relevant information because

of the matching of key words. The secondary analysis then has been used to

shed light on the primary data analysis for a better overall approach to the

topic and so that the vulnerability of the manufacturing and the construction

sector could be studied from two different, but supporting dimensions.

2.4 Limitations of the Research

As mentioned earlier, the section of the report is going to talk about the

problems that were faced during the condition of the research and the

problems that would be faced by the reader if he or she is looking for a

perfect regression or correlation analysis between the same dependent and

independent variables, which means, an analysis which is low on residuals


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and other econometrics problems that company a simple ordinary least

square regression analysis.

So first things first, the problems faced during the conduction of this

research were many. For starters it was the finding out of the data. But thegovernment offices could not be contacted personally, and also because of

the bias that everything is easily available on the World Wide Web, it was

decided to search for the data online. The data found relevant enough to be

further looked into had a couple of problems then again. The first one was

that most of the data had to be purchased and since finance was a strong

constraint, that could not be done. Secondly, the data that was free and for

public information and use, was available in the form of graphs and chartswhich could not be directly copied. Thus, for regression analysis, the finding

of numerical data was an important limitation faced while data collection.

Given the problems discussed above, the regression analysis that was

expected to be carried out at the starting of this report could not be carried

out with the hoped and desired perfection. The research is limited because of

empirical imperfection however; it seeks to balance out that imbalance

through the secondary research and analysis. The secondary research hashelped greatly in covering up for the rough patches that were created by the

lack of data for the regression analysis however, the limitation that the

research paper has still exists significantly and the reader of this report

should strictly take that into account while applying the results of this report.

2.5 Ethical Issues taken into Account

Ethical issues form a major part of the research paper that are written and

therefore, this research paper carefully takes into account the fact.

However fortunately, no major ethical issue formed an obstacle in this

research primarily because the data required for this research was public

data and openly available. The secondary data that was used for this report


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however has been carefully referenced in the project as demanded by the

following of copyright rules and policies and also those of the report format.

The references are provided both in text and as a bibliography at the end of

the report for further reading and study.

Chapter Four: Data Analysis

Economy Watch (Stanley 2011) states that, the economy of the United

Kingdom is the sixth largest economy of the world in 2010 according to the

nominal GDP and the eight largest economy in the world according to the

purchasing power parity GDP.

4.1 Civil Engineering Sector of the United Kingdom (measured by

construction industry output)

Adamson and Pollington (Adamson and Pollington 2006) note that

construction is the sixth largest industry in the United Kingdom and that in

terms of its proportion of the total gross domestic product. In 2002, the

industrys output was valued at sixty five billion pounds annually which


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actually represented ten percent of the overall gross domestic product. The

following graph will depict the trend of output of the construction industry in

the United Kingdom.

As shown by the graph, starting from 1996, and the construction industry

has shown an upward trend (the data was available till 2006). The theoryabove however explains the fall of the construction sector in 2008 and 2009

and then its recovery later. Even though the graph from the official record

accounts for the trend in the civil engineering sector till 2006, the analysis

henceforth explains the till after 2006 to study what routes the output of the

construction sector took.

Corporate Watch (2011) studies the importance and the trend of the

construction industry of the United Kingdom and states that it accounts for

ten percent of the Gross domestic product of the country and employs over

1.5 million people. Since 2000, the fiscal budget of the United Kingdom has

made substantial increases to the civil engineering sector of the country to

improve public services. The 2003-2004 fiscal budgets made an increase of


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33 billion pounds to the betterment and funding of the sector which included

4,200 million pounds for transport and 137,000 million pounds for health

along with 1,600 million pounds for housing (Corporate Watch, 2011).

The interesting thing here is the fact that the civil engineering sector of theeconomy under question is led by investment, both private and public and

therefore, it is prone to the economic fluctuations that any economic variable

faces. One important incidence when the civil engineering sector was

adversely affected by the recession of the entire economy (aggregated

external factors) was in 1980s and then in early 1990s, and then it took an

upward turn in the late 1990s, owing mainly to the government financed

input into programs such that the public health, education andtransportation.

Cohen (2011) from financial Times named the construction sector of United

Kingdom as volatile and said that in the last quarter of 2010, the output of

the sector fell in the official records. The Office for national Statistics (2010)

said that the output fell by 2.5 percent however; there was definitely an

improvement from the initially low output level of 2009.

Monaghan (2010) however noted in the telegraph that the construction

sector of the United Kingdom has been the one which has been the most

affected by the economic downturn of 2008 and 2009. It has been stated

that the total construction on the Purchasing Managers Index (PMI) was 47.1

in December 2009 and that the same index has not managed to improve

over 50 since early 2008.

4.2 Mechanical Engineering Sector of the United Kingdom

(measured by manufacturing sectors output)

Before the paper can proceed to any further explains, the graph that depicts

the trend of the manufacturing sector is proposed to be put forward:


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Figure 1 House of Commons UK, (2011)

The figure above is an important chart published by the parliament of the

United Kingdom in response to the studying of the various economic

indicators over the years before any substantial policy change is proposed.

As clearly visible from the chart above, the manufacturing output took a very

deep turn in 2009 and that the industry itself was in the phase of decline

since 2008. This means that the recession of 2008 really affected the

mechanical engineering sector of the United Kingdom where the outputactually fell by 15 percent in 2009 as compared to that in 2008. The

fortunate thing over here as depicted by the graph is the fact that the

industry again took an upward turn after 2010 and is seen to rise rather

sharply after that. It can be said that the pent up demand for the

manufacturing output actually drove the industry to new heights, one those

did not even exist before the recession in the first place. The analysis of the

situation leads the research to seeing that the government input into the

sector during the times of the recession really helped the industry to revive

and to reach greater levels of success. The reasons for the fluctuation in the

trend of output for the manufacturing sector will be analyzed in the

conclusion part. For this section of the report, it will be studied further that in

2009 again, the Manufacturing Purchasing managers index also contracted


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As visible in the chart above, the exchange rate falls around 2007 and 2008

but the fall in the construction and the manufacturing sector is felt around

2009. This means that the economy of the United Kingdom took time to

adjust to the new prices and will the new exchange rate finally made its

influence; the imports of the raw materials had become expensive. The

apparent delay in the change of exchange rate and the delay of the two

engineering sectors can also be because of the previously contracted orders.

The recommendation that the policy makers need to derive out of this is that

when the imports are low, the capital investments must be contracted so

that some price hedge can be achieved in response to a fall in the price of

the currency and thus the exchange rates.

One flaw of open economies like United Kingdom is that they are highly

affected by changes abroad (Mankiw, Gans et al. 2008). So if a recession is

occurring elsewhere, UK exports, investment and foreign exchange will

suffer. If a lot of its workers work abroad then even its employment will

suffer. But such an integration of an economy with others also provides

opportunities to smooth out changes in the business cycle. All depends onthe ability of the UK economy to absorb these changes and have policies that

eliminate the adverse effects of them.

Exchange rates and aggregate demand

Exchange rate is basically the value of a currency in terms of a foreign

currency (Copeland 2008). Exchange rate is often overlooked as a

determinant for aggregate demand; this is because net exports have a

smaller effect on aggregate demand relative to consumption, investment or

government spending. But still the impact is there quite clear (Samuelson

2005). So, a change in exchange rate will affect net exports and depending

on the intensity and direction of this change the aggregate demand curve


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the year and has been on the rise till 2010, where again it took a downward

turn, but it no fall too deep. The fall in the GDP in 2010 was because of the

economy of the United Kingdom being pegged to the Euro which fell sharply

due to the Greece financial crisis in 2010.

The Most important thing to be noted in the entire discussion is the dip the

economy of the United Kingdom took in year 2009. Why this is important

then, will be discussed in the conclusion section when this is related to

theoretically to the dips that the construction and the manufacturing sectors

of the economy took in the same year.

The Office for national Statistic (2011) however notes that manufacturing

and construction sectors of the economy as well as the mining sector had a

very significant role to play in the fluctuations of the GDP as a whole and that

if one was to study the fluctuations in the GDP, these three sectors would be

of utmost importance.


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This graph actually depicts the production of steel in United Kingdom and

shows a situation which is not very pleasant as far as investment into the

steel production sector of the economy is concerned. The labor forceemployed in the sector is seen to decline after 2001 and then can be seen to

be almost constant. As far as the production is concerned however, one can

see the fluctuations that exist and see most importantly that the steel

production in the country took a low dip in 2009 by becoming 10.1 million

tons as compared to 14.4 million tons in 2007 (before the economic

recession that is. Before that, even though there was an economic recession,

not very major that is however, in the early 1990s, the steel production is not

seen to decline. The fall in the manufacturing sector output can be because

of the high steel prices in 2008 leading to a fall in demand and thus a fall in

the production in 2009. The fall in production of 2009 then again can be seen

to have a negative impact on the manufacturing and the construction

departments of the economy who seemed to have a supply shock first

because of the increase in prices and then because of the shortages in

production. The demand of steel in the United Kingdoms economy as

explained by EEF (2010) shows that the demand dipped the most in 2009 as


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compared to any other preceding year. Not only did the imports of steel fell,

the steel supplied by the UK steel mills also fell sharply. This then meant bad

news for not only the steel manufacturing industry but also the other sectors

of the economy that required steel for their operations.

Previously, The United Kingdom has been the twelfth largest producer of

steel in the world with quality refining and extracting. However, as of today,

major shift of steel production has been towards the Asian countries of the

world with China leading the marketing today. Again, this is an example of a

supply shock for the economy of the United Kingdom owing to the fact that

competition took over the market. However, one can see the change in

terms of a demand shock as well considering that fact that the supply fell

firstly owing to the dip in demand because of high steel prices. Steel is abasic requirement for both the civil engineering and mechanical engineering

sectors of an economy and a very important part of the fluctuations in the

output of the two can be determined by the fluctuations in the prices and

quantity of the steel.

The Oil Prices


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Chapter Five: Conclusion

Finally, this section of the paper is going to study the three factors and the

two sectors of the economy. The type of analysis presented here will be

conclusive, one that has been drawn from the facts and the analysis of trendpresented in chapter four.

Now, there are the following facts that need to be stated before any further

comparison is done.

The civil engineering sector of the economy measured by the output of

the construction sector fell sharply in 2009 and improved afterwards.

The mechanical engineering sector of the economy measured by the

output of the manufacturing sector fell sharply in 2009 and improved

afterwards.

Factors:

The exchange rate of the United Kingdom (the buying power of the

country) fell in 2008 and increased again in 2009 to fall yet again in

2010 because of the Greece financial crisis

The Gross domestic product of the country fell sharply in 2009

becoming the lowest in a long time however it improved significantly

after 2009 and the economy today is not the track of growth in terms

of GDP.


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The steel prices in the United Kingdom peaked in 2008 and then fell in

2009.

The international oil prices rose to their highest historical values in

2008 and then fell again in 2009.

The conclusion that is derivable from the facts in not difficult to see at all and

is actually quite apparent. However, for simplicity sake and for the

betterment of the analysis, the ceteris paribus effect is assumed. This means

that it is assumed that each of the three factors affected the two dependent

factors individually while the other factors remained constant.

As can be seen then, there seems to be a negative relationship between theoil prices and the steel prices and the output of the two sectors. This is

because the rise in the cost of production limits the profits that can be

derived from the production and therefore the organizations limited their

production to marginalize profits.

As far as GDP is concerned however, there seems to be a positive

relationship between the two dependant variable and GDP. As the GDP fell,

so did the two engineering sectors. It can also be seen in this way that as thetwo important sectors of the economy fell, so did the GDP.

Finally, the exchange rate also seems to have a negative relationship with

the two engineering sectors because a rise in value of pound makes the

exports of the country and investing into the country more expensive, thus

discouraging the two.


36/76

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Guillaumont, P., S. Jeanneney, et al. (2004). "Attenuating through aid the

vulnerability to price shocks." Economic Integration and Social

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Baxter, M. (1991). "Business cycles, stylized facts, and the exchange rate regime:

evidence from the United States." Journal of international money and finance10(1): 71-88.

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Blanchard, O. J. and D. Quah (1990). The dynamic effects of aggregate demand andsupply disturbances, National Bureau of Economic Research Cambridge,Mass., USA.

Bruno, M. and J. Sachs (1982). "Input price shocks and the slowdown in economicgrowth: the case of UK manufacturing." The Review of Economic Studies49(5): 679.

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Cashin, P. and C. J. McDermott (2002). "The long-run behavior of commodity prices:small trends and big variability." IMF staff Papers 49(2): 175-199.

Copeland, L. S. (2008). Exchange rates and international finance, Addison-WesleyPub Co.

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commodity prices?, International Monetary Fund.Currie, D. A., G. Britain, et al. (1997). The pros and cons of EMU, Economist

Intelligence Unit.De Grauwe, P., R. Dieci, et al. (2005). Fundamental and non-fundamental equilibria

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Guardian.

Appendix


39/76

Appendix A: Oil PricesBack toContents

Data 1:WeeklyEurope (UK)Brent Blend

Spot PriceFOB (Dollarsper Barrel)

Sourcekey WEPCBRENT

Date WeeklyEurope (UK)Brent BlendSpot PriceFOB (Dollarsper Barrel)

Jan 06,1989

15.8

Jan 05,1990

21

Jan 04,1991

27.2

Jan 03,1992

17.75

Jan 01,1993

17.9

Jan 07,1994

13.15

Jan 06,

1995

16.15

Jan 05,1996

19.37

Jan 03,1997

24.05

Jan 10,1997

24.43

Jan 17,1997

22.99

Jan 24,1997

22.81

Jan 31,

1997

23.37

Feb 07,1997

21.86

Feb 14,1997

20.7

Feb 21,1997

20.14

Feb 28, 19.34
http://opt/scribd/conversion/Ayesha%20Arshad/Desktop/Sparkles%20soft/Oil%20price.xls#Contents!A1http://opt/scribd/conversion/Ayesha%20Arshad/Desktop/Sparkles%20soft/Oil%20price.xls#Contents!A1http://opt/scribd/conversion/Ayesha%20Arshad/Desktop/Sparkles%20soft/Oil%20price.xls#Contents!A1http://opt/scribd/conversion/Ayesha%20Arshad/Desktop/Sparkles%20soft/Oil%20price.xls#Contents!A1


40/76


41/76


42/76

1998

Feb 06,1998

14.8

Feb 13,1998

14.07

Feb 20,1998

13.71

Feb 27,1998

13.3

Mar 06,1998

12.95

Mar 13,1998

12.44

Mar 20,1998

12.29

Mar 27,1998

14.99

Apr 03,1998

13.74

Apr 10,1998

13.2

Apr 17,1998

13.9

Apr 24,1998

13.33

May 01,1998

14.32

May 08,1998

14.01

May 15,1998

14.69

May 22,1998

14.42

May 29,1998

14.68

Jun 05,1998

13.08

Jun 12,1998

11.67

Jun 19,

1998

10.9

Jun 26,1998

12.29

Jul 03,1998

12.13

Jul 10,1998

14

Jul 17, 12.43


43/76

1998

Jul 24,1998

12.16

Jul 31,1998

12.61

Aug 07,1998

12.03

Aug 14,1998

11.74

Aug 21,1998

12.07

Aug 28,1998

12.04

Sep 04,1998

13.01

Sep 11,1998

12.82

Sep 18,1998

13.48

Sep 25,1998

14.78

Oct 02,1998

14.15

Oct 09,1998

13.08

Oct 16,1998

12.17

Oct 23,1998

11.81

Oct 30,1998

12.03

Nov 06,1998

11.42

Nov 13,1998

11.76

Nov 20,1998

10.68

Nov 27,1998

10.53

Dec 04,

1998

9.33

Dec 11,1998

9.2

Dec 18,1998

9.55

Dec 25,1998

10.02

Jan 01, 10.44


44/76

1999

Jan 08,1999

11.57

Jan 15,1999

10.95

Jan 22,1999

11.2

Jan 29,1999

11.04

Feb 05,1999

10.18

Feb 12,1999

10.06

Feb 19,1999

10.21

Feb 26,1999

10.73

Mar 05,1999

11.1

Mar 12,1999

12.06

Mar 19,1999

13.05

Mar 26,1999

13.82

Apr 02,1999

14.56

Apr 09,1999

14.36

Apr 16,1999

15.08

Apr 23,1999

15.93

Apr 30,1999

16.6

May 07,1999

15.38

May 14,1999

15.13

May 21,

1999

14.63

May 28,1999

14.74

Jun 04,1999

14.83

Jun 11,1999

16.15

Jun 18, 16.03


45/76

1999

Jun 25,1999

16.33

Jul 02,1999

17.32

Jul 09,1999

18.68

Jul 16,1999

19.45

Jul 23,1999

19.39

Jul 30,1999

19.86

Aug 06,1999

19.92

Aug 13,1999

20.68

Aug 20,1999

21.23

Aug 27,1999

20.21

Sep 03,1999

20.8

Sep 10,1999

22.71

Sep 17,1999

22.97

Sep 24,1999

23.41

Oct 01,1999

22.83

Oct 08,1999

20.81

Oct 15,1999

21.75

Oct 22,1999

22.08

Oct 29,1999

21.14

Nov 05,

1999

22.89

Nov 12,1999

25.08

Nov 19,1999

25.08

Nov 26,1999

25.25

Dec 03, 26


46/76

1999

Dec 10,1999

24.99

Dec 24,1999

24.77

Dec 31,1999

25.1

Jan 07,2000

23.26

Jan 14,2000

25.39

Jan 21,2000

27.18

Jan 28,2000

26.17

Feb 04,2000

27.49

Feb 11,2000

27.37

Feb 18,2000

27.85

Feb 25,2000

28.69

Mar 03,2000

30.05

Mar 10,2000

29.22

Mar 17,2000

27.61

Mar 24,2000

25.36

Mar 31,2000

24.07

Apr 07,2000

23.3

Apr 14,2000

22.23

Apr 21,2000

23.46

Apr 28,

2000

23.4

May 05,2000

24.83

May 12,2000

28.67

May 19,2000

28.93

May 26, 30.06


47/76

2000

Jun 02,2000

29.1

Jun 09,2000

28.52

Jun 16,2000

29.94

Jun 23,2000

30.8

Jun 30,2000

31.82

Jul 07,2000

30.49

Jul 14,2000

30.52

Jul 21,2000

26.87

Jul 28,2000

25.85

Aug 04,2000

27.63

Aug 11,2000

29.18

Aug 18,2000

30.73

Aug 25,2000

30.38

Sep 08,2000

36.26

Sep 15,2000

32.77

Sep 22,2000

32.43

Sep 29,2000

28.48

Oct 06,2000

29.62

Oct 13,2000

33.39

Oct 20,

2000

30.56

Oct 27,2000

31.24

Nov 03,2000

30.54

Nov 10,2000

32.28

Nov 17, 33.43


48/76

2000

Nov 24,2000

32.98

Dec 01,2000

31.12

Dec 08,2000

26.86

Dec 15,2000

25.45

Dec 22,2000

22.23

Dec 29,2000

22.5

Jan 05,2001

24.52

Jan 12,2001

25.53

Jan 19,2001

26.23

Jan 26,2001

26.46

Feb 02,2001

28.67

Feb 09,2001

29.67

Feb 16,2001

26.61

Feb 23,2001

26.08

Mar 02,2001

25.27

Mar 09,2001

25.65

Mar 16,2001

24.11

Mar 23,2001

23.76

Mar 30,2001

23.85

Apr 06,

2001

23.97

Apr 13,2001

26.45

Apr 20,2001

25.54

Apr 27,2001

27.02

May 04, 27.4


49/76

2001

May 11,2001

27.78

May 18,2001

29.44

May 25,2001

28.79

Jun 01,2001

28.81

Jun 08,2001

29.55

Jun 15,2001

28.19

Jun 22,2001

26.61

Jun 29,2001

26.13

Jul 06,2001

26.34

Jul 13,2001

23.9

Jul 20,2001

23.09

Jul 27,2001

24.49

Aug 03,2001

25.52

Aug 10,2001

25.75

Aug 17,2001

24.74

Aug 24,2001

26.13

Aug 31,2001

26.68

Sep 07,2001

27.4

Sep 14,2001

29.01

Sep 21,

2001

25

Sep 28,2001

21.69

Oct 05,2001

21.29

Oct 12,2001

20.5

Oct 19, 19.8


50/76

2001

Oct 26,2001

20.23

Nov 02,2001

19.49

Nov 09,2001

19.6

Nov 16,2001

16.98

Nov 23,2001

19.47

Nov 30,2001

18.87

Dec 07,2001

17.66

Dec 14,2001

18.42

Dec 21,2001

18.6

Dec 28,2001

19.75

Jan 04,2002

21.2

Jan 11,2002

19.93

Jan 18,2002

18.14

Jan 25,2002

19.12

Feb 01,2002

19.74

Feb 08,2002

20.09

Feb 15,2002

20.68

Feb 22,2002

20.06

Mar 01,2002

21.86

Mar 08,

2002

22.24

Mar 15,2002

23.78

Mar 22,2002

24.87

Mar 29,2002

25.15

Apr 05, 25.97


51/76

2002

Apr 12,2002

23.2

Apr 19,2002

25.33

Apr 26,2002

26.86

May 03,2002

25.76

May 10,2002

26.43

May 17,2002

25.43

May 24,2002

24.17

May 31,2002

23.87

Jun 07,2002

23.26

Jun 14,2002

24.09

Jun 21,2002

24.07

Jun 28,2002

25.31

Jul 05,2002

25.78

Jul 12,2002

25.86

Jul 19,2002

26.17

Jul 26,2002

25.2

Aug 02,2002

25.51

Aug 09,2002

25.37

Aug 16,2002

26.76

Aug 23,

2002

27.55

Aug 30,2002

27.33

Sep 06,2002

28.7

Sep 13,2002

28.47

Sep 20, 28.17


52/76

2002

Sep 27,2002

28.96

Oct 04,2002

28.82

Oct 11,2002

28.07

Oct 18,2002

28.39

Oct 25,2002

27.05

Nov 01,2002

25.62

Nov 08,2002

24.79

Nov 15,2002

23.38

Nov 22,2002

23.91

Nov 29,2002

24.81

Dec 06,2002

25.56

Dec 13,2002

25.6

Dec 20,2002

29.73

Dec 27,2002

30.51

Jan 03,2003

31.36

Jan 10,2003

30.1

Jan 17,2003

31.45

Jan 24,2003

31.81

Jan 31,2003

31.8

Feb 07,

2003

31.75

Feb 14,2003

32.41

Feb 21,2003

33.06

Feb 28,2003

33.85

Mar 07, 33.9


53/76

2003

Mar 14,2003

34.18

Mar 21,2003

29.25

Mar 28,2003

26.2

Apr 04,2003

26.89

Apr 11,2003

25.36

Apr 18,2003

24.56

Apr 25,2003

24.93

May 02,2003

23.5

May 09,2003

23.7

May 16,2003

25.74

May 23,2003

27.18

May 30,2003

26.55

Jun 06,2003

27.58

Jun 13,2003

28.39

Jun 20,2003

26.68

Jun 27,2003

27.1

Jul 04,2003

27.92

Jul 11,2003

28.15

Jul 18,2003

28.7

Jul 25,

2003

28.33

Aug 01,2003

28.23

Aug 08,2003

30.14

Aug 15,2003

29.59

Aug 22, 29.14


54/76

2003

Aug 29,2003

29.77

Sep 05,2003

28.38

Sep 12,2003

26.59

Sep 19,2003

25.8

Sep 26,2003

26.13

Oct 03,2003

28.11

Oct 10,2003

29.19

Oct 17,2003

31.11

Oct 24,2003

29.49

Oct 31,2003

28.8

Nov 07,2003

28.02

Nov 14,2003

28.71

Nov 21,2003

29.42

Nov 28,2003

28.46

Dec 05,2003

28.87

Dec 12,2003

29.87

Dec 19,2003

30.4

Dec 26,2003

30.04

Jan 02,2004

29.73

Jan 09,

2004

31.11

Jan 16,2004

31.96

Jan 23,2004

31.59

Jan 30,2004

30.53

Feb 06, 29.6


55/76

2004

Feb 13,2004

29.9

Feb 20,2004

31.04

Feb 27,2004

31.9

Mar 05,2004

33.48

Mar 12,2004

33.88

Mar 19,2004

34.17

Mar 26,2004

34.19

Apr 02,2004

32.59

Apr 09,2004

31.63

Apr 16,2004

33.45

Apr 23,2004

33.26

Apr 30,2004

33.86

May 07,2004

36.3

May 14,2004

37.8

May 21,2004

38.74

May 28,2004

37.91

Jun 04,2004

37.78

Jun 11,2004

35.48

Jun 18,2004

35.1

Jun 25,

2004

34.96

Jul 02,2004

33.41

Jul 09,2004

36.16

Jul 16,2004

37.48

Jul 23, 38.96


56/76

2004

Jul 30,2004

40.18

Aug 06,2004

42.25

Aug 13,2004

43.53

Aug 20,2004

44.74

Aug 27,2004

43

Sep 03,2004

40.9

Sep 10,2004

41.14

Sep 17,2004

41.87

Sep 24,2004

44.12

Oct 01,2004

47.04

Oct 08,2004

47.46

Oct 15,2004

50.44

Oct 22,2004

49.91

Oct 29,2004

51.48

Nov 05,2004

46.25

Nov 12,2004

43.38

Nov 19,2004

40.53

Nov 26,2004

42.65

Dec 03,2004

42.06

Dec 10,

2004

37.98

Dec 17,2004

38.21

Dec 24,2004

42.86

Dec 31,2004

39.43

Jan 07, 41.39


57/76

2005

Jan 14,2005

43.84

Jan 21,2005

44.92

Jan 28,2005

46.09

Feb 04,2005

44.28

Feb 11,2005

43.39

Feb 18,2005

44.77

Feb 25,2005

47.45

Mar 04,2005

50.74

Mar 11,2005

52.89

Mar 18,2005

53.95

Mar 25,2005

54.81

Apr 01,2005

52.15

Apr 08,2005

54.43

Apr 15,2005

51.44

Apr 22,2005

51.42

Apr 29,2005

51.88

May 06,2005

49.86

May 13,2005

49.1

May 20,2005

47.25

May 27,

2005

47.95

Jun 03,2005

51.21

Jun 10,2005

53.26

Jun 17,2005

53.57

Jun 24, 56.73


58/76

2005

Jul 01,2005

56.81

Jul 08,2005

57.73

Jul 15,2005

57.63

Jul 22,2005

56.56

Jul 29,2005

57.39

Aug 05,2005

59.97

Aug 12,2005

62.41

Aug 19,2005

65.84

Aug 26,2005

64.57

Sep 02,2005

66.34

Sep 09,2005

65.82

Sep 16,2005

62.15

Sep 23,2005

62.36

Sep 30,2005

62.47

Oct 07,2005

60.66

Oct 14,2005

58.57

Oct 21,2005

57.99

Oct 28,2005

58.3

Nov 04,2005

58.76

Nov 11,

2005

57.71

Nov 18,2005

53.99

Nov 25,2005

53.57

Dec 02,2005

53.23

Dec 09, 55.99


59/76

2005

Dec 16,2005

58.47

Dec 23,2005

56.82

Dec 30,2005

57.25

Jan 06,2006

60.93

Jan 13,2006

62.42

Jan 20,2006

63.09

Jan 27,2006

63.99

Feb 03,2006

64.73

Feb 10,2006

61.84

Feb 17,2006

58.41

Feb 24,2006

58.5

Mar 03,2006

60.39

Mar 10,2006

60.73

Mar 17,2006

61.39

Mar 24,2006

61.71

Mar 31,2006

64.16

Apr 07,2006

66.82

Apr 14,2006

68.28

Apr 21,2006

72.1

Apr 28,

2006

73.07

May 05,2006

72.96

May 12,2006

70.47

May 19,2006

68.86

May 26, 67.96


60/76

2006

Jun 02,2006

69.43

Jun 09,2006

68.06

Jun 16,2006

66.83

Jun 23,2006

67.24

Jun 30,2006

71.1

Jul 07,2006

73.26

Jul 14,2006

73.78

Jul 21,2006

74.24

Jul 28,2006

73.39

Aug 04,2006

75.78

Aug 11,2006

77.33

Aug 18,2006

73.37

Aug 25,2006

71.51

Sep 01,2006

68.09

Sep 08,2006

65.64

Sep 15,2006

62.97

Sep 22,2006

60.49

Sep 29,2006

58.72

Oct 06,2006

57.89

Oct 13,

2006

57.79

Oct 20,2006

57.67

Oct 27,2006

57.66

Nov 03,2006

57.74

Nov 10, 59.33


61/76

2006

Nov 17,2006

58.46

Nov 24,2006

58.42

Dec 01,2006

61.83

Dec 08,2006

64.37

Dec 15,2006

62.34

Dec 22,2006

62.44

Dec 29,2006

60.5

Jan 05,2007

56.66

Jan 12,2007

51.82

Jan 19,2007

50.98

Jan 26,2007

53.8

Feb 02,2007

55.7

Feb 09,2007

57.45

Feb 16,2007

55.85

Feb 23,2007

57.2

Mar 02,2007

60.87

Mar 09,2007

60.74

Mar 16,2007

60.69

Mar 23,2007

60.85

Mar 30,

2007

64.98

Apr 06,2007

68.57

Apr 13,2007

67.85

Apr 20,2007

66.78

Apr 27, 67.13


62/76

2007

May 04,2007

66.92

May 11,2007

66.92

May 18,2007

66.92

May 25,2007

70.32

Jun 01,2007

68.91

Jun 08,2007

70.7

Jun 15,2007

69.57

Jun 22,2007

72.05

Jun 29,2007

71.69

Jul 06,2007

72.75

Jul 13,2007

76.9

Jul 20,2007

78.35

Jul 27,2007

77.22

Aug 03,2007

76.53

Aug 10,2007

71.87

Aug 17,2007

69.79

Aug 24,2007

68.54

Aug 31,2007

70.22

Sep 07,2007

74.27

Sep 14,

2007

76.14

Sep 21,2007

77.46

Sep 28,2007

77.96

Oct 05,2007

78.07

Oct 12, 78.66


63/76

2007

Oct 19,2007

83.61

Oct 26,2007

84.14

Nov 02,2007

89.4

Nov 09,2007

93.52

Nov 16,2007

90.77

Nov 23,2007

94.7

Nov 30,2007

94.79

Dec 07,2007

90.63

Dec 14,2007

91.43

Dec 21,2007

92.49

Dec 28,2007

93.25

Jan 04,2008

98.42

Jan 11,2008

97.82

Jan 18,2008

91.96

Jan 25,2008

89.68

Feb 01,2008

93.15

Feb 08,2008

91.52

Feb 15,2008

95.41

Feb 22,2008

98.83

Feb 29,

2008

99.69

Mar 07,2008

102.3

Mar 14,2008

107.94

Mar 21,2008

106.21

Mar 28, 103.99


64/76

2008

Apr 04,2008

101.35

Apr 11,2008

107

Apr 18,2008

111.44

Apr 25,2008

114.64

May 02,2008

113.52

May 09,2008

118.77

May 16,2008

123.45

May 23,2008

126.33

May 30,2008

130.13

Jun 06,2008

125.47

Jun 13,2008

134.87

Jun 20,2008

133.85

Jun 27,2008

135.98

Jul 04,2008

142.45

Jul 11,2008

137.81

Jul 18,2008

139.34

Jul 25,2008

129.16

Aug 01,2008

125.29

Aug 08,2008

120.15

Aug 15,

2008

114.01

Aug 22,2008

110.1

Aug 29,2008

115.11

Sep 05,2008

108.46

Sep 12, 101.61


65/76

2008

Sep 19,2008

92.89

Sep 26,2008

101.41

Oct 03,2008

96.2

Oct 10,2008

83.8

Oct 17,2008

71.95

Oct 24,2008

65.54

Oct 31,2008

60.71

Nov 07,2008

60.45

Nov 14,2008

53.32

Nov 21,2008

49.15

Nov 28,2008

48.96

Dec 05,2008

45.15

Dec 12,2008

41.17

Dec 19,2008

42.68

Dec 26,2008

36.31

Jan 02,2009

34.33

Jan 09,2009

44.52

Jan 16,2009

42.37

Jan 23,2009

44.01

Jan 30,

2009

43.8

Feb 06,2009

43.63

Feb 13,2009

45.17

Feb 20,2009

42.29

Feb 27, 41.97


66/76

2009

Mar 06,2009

44.16

Mar 13,2009

44.04

Mar 20,2009

45.8

Mar 27,2009

51.19

Apr 03,2009

48.58

Apr 10,2009

51.4

Apr 17,2009

51.7

Apr 24,2009

49.16

May 01,2009

49.78

May 08,2009

53.89

May 15,2009

56.5

May 22,2009

57.63

May 29,2009

60.59

Jun 05,2009

66.55

Jun 12,2009

69.41

Jun 19,2009

69.7

Jun 26,2009

68.52

Jul 03,2009

67.96

Jul 10,2009

61.58

Jul 17,

2009

60.25

Jul 24,2009

65.67

Jul 31,2009

68.59

Aug 07,2009

72.89

Aug 14, 73.14


67/76

2009

Aug 21,2009

71.42

Aug 28,2009

72.22

Sep 04,2009

68.94

Sep 11,2009

68.56

Sep 18,2009

68.22

Sep 25,2009

67.28

Oct 02,2009

65.45

Oct 09,2009

67.29

Oct 16,2009

71.47

Oct 23,2009

76.76

Oct 30,2009

76.8

Nov 06,2009

76.53

Nov 13,2009

76.6

Nov 20,2009

77

Nov 27,2009

76.47

Dec 04,2009

77.24

Dec 11,2009

74.7

Dec 18,2009

71.48

Dec 25,2009

72.91

Source: http://www.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?

n=PET&s=WEPCBRENT&f=W


68/76

Appendix B: Steel PricesDataset

Name:

ppi

Title: Producer prices: Index numbers of input and output prices (SIC07)

Description:

Index number of input and output prices, 2005=100 (SIC07)

Source: Office for National Statistics

Substitution Details:

Value Meaning

.. not available

====================================

Series Characteristics:

Series

Identifier

Type of price Industry Seasonali

ty

K646 Input prices(materials andfuel)

All manufacturing inc CCL not seasonallyadjusted


Manufacturing excluding food,beverages, tobacco andpetroleum, inc CCL

not seasonallyadjusted


Manufacturing excluding food,beverages, tobacco andpetroleum, inc CCL

Seasonallyadjusted

JVZ7 Output prices(home sales) All manufacturing not seasonallyadjustedK3BI Output prices

(home sales)Manufacturing excluding food not seasonally

adjusted

JVZ8 Output pricesexcludingexcise duty

All manufacturing not seasonallyadjusted

====================================

Table

K646 K655 K658

JVZ7

K3BI

JVZ8

1996 103.2 110.3 110

.3

94.

1

102

.3

97.

71997 94.7 103.3 103

.395 102

.697.8

1998 86.1 98.5 98.5

95 101.7

96.9

1999 85 95 95 95.6

100.7

96.6

2000 91.3 98.5 98. 96. 100 97.


69/76

5 9 .2 4

2001 90.2 97.3 97.3

96.6

99.6

97.1

2002 86.2 92.6 92.6

96.5

99.2

97

2003 87.2 92 92 97.1 99.3 97.52004 90.1 93.5 93.

598.1

99 98.1

2005 100 100 100 100 100 100

2006 109.8 107.2 107.3

102 101.5

102

2007 113 109.8 109.8

104.4

102.9

104.1

2008 138.1 128.4 128.4

111.4

106.7

111.1

2009 132.9 130.5 130

.5

113

.2

109

.4

112

.22010 146.1 138 137

.9117.9

112.7

116.6

1996 01 106.2 115.8 114.3

93.5

102.1

97.1

1996 02 105.4 114.8 113.8

93.6

102.2

97.2

1996 03 105.6 112.8 112.8

93.8

102.5

97.5

1996 04 106.1 111.8 112.3

94.2

102.6

97.9

1996 05 104.5 110.9 111.3 94.1 102.6 97.91996 06 103.4 109.7 110

.593.9

102.5

97.7

1996 07 101.4 108.2 109.4

93.8

102.3

97.5

1996 08 100.8 108.2 108.8

94 102.3

97.6

1996 09 101.3 107.7 108.3

94.3

102.3

97.9

1996 10 101.8 107.9 108.1

94.4

102.2

97.9

1996 11 100.4 107.9 107.3

94.4

102.3

97.9

1996 12 101.3 108.5 107.2

94.7

102.3

97.8

1997 01 100.6 107.7 106.3

94.9

102.5

98

1997 02 98.7 106.1 105.3

94.7

102.5

97.7


70/76


71/76


72/76

2001 03 91.5 99.6 99.3

96.6

99.8

97

2001 04 92.2 99.6 99.6

96.8

99.8

97.3

2001 05 93.3 99.1 99.3

97.1

99.8

97.7

2001 06 93.1 98.7 99 97 99.7

97.7

2001 07 90.5 97.1 97.7

96.8

99.6

97.4

2001 08 89.5 95.6 96 96.7

99.5

97.3

2001 09 88.6 94.8 95.2

96.7

99.4

97.3

2001 10 86.1 94.1 94.4

96.5

99.4

97.1

2001 11 86 94.1 93.

8

95.

9

99.

3

96.

52001 12 85.6 93.8 93.

295.9

99.2

96.3

2002 01 86 93.8 93.5

96 99.2

96.5

2002 02 86 93.7 93.3

96 99 96.4

2002 03 87.1 93.7 93.3

96.1

99 96.6

2002 04 87.2 93.3 93.2

96.5

99.1

97

2002 05 86.6 92.9 93.1

96.7

99.2

97.2

2002 06 86.2 92.9 93.2

96.6

99.2

97.1

2002 07 85.7 92.1 92.5

96.6

99.3

97

2002 08 86.2 92.1 92.5

96.6

99.3

97

2002 09 86.2 91.6 92.1

96.7

99.3

97.2

2002 10 85.9 91.5 91.8

96.8

99.3

97.3

2002 11 84.6 91.6 91.3

96.7

99.3

97.1

2002 12 86.7 92.3 91.7

96.7

99.4

97.2

2003 01 87.5 91.7 91.5

97 99.5

97.5

2003 02 88.3 92.3 92 97 99.4

97.5


73/76

2003 03 88.4 93 92.5

97.5

99.4

98

2003 04 85.9 92.1 92 97.3

99.4

97.7

2003 05 85.4 91.7 91.9

97 99.3

97.4

2003 06 85.8 91.2 91.5

97 99.2

97.3

2003 07 86.5 91.4 91.7

97 99.2

97.3

2003 08 88.1 92 92.3

97.1

99.2

97.4

2003 09 86.8 91.7 92.3

97 99.2

97.4

2003 10 87.6 92.1 92.5

97.1

99.1

97.3

2003 11 88 92.5 92.

2

97.

2

99.

1

97.

42003 12 88.1 92.5 91.

897.2

99.1

97.4

2004 01 87.1 91.7 91.4

97.2

99 97.4

2004 02 86.5 91.2 91 97.2

98.8

97.3

2004 03 88.6 92.5 91.9

97.3

98.7

97.4

2004 04 88.5 92.6 92.4

97.6

98.7

97.6

2004 05 90.5 93.4 93.7

98.1

98.8

98.1

2004 06 88.8 92.6 93 98.1

98.9

98.1

2004 07 89.5 92.8 92.9

98.2

99 98.2

2004 08 91.6 93.8 94.1

98.2

99.1

98.3

2004 09 92.6 94.7 95.4

98.6

99.3

98.6

2004 10 94.8 96.1 96.6

98.9

99.4

98.9

2004 11 92.6 95.9 95.5

98.9

99.4

99

2004 12 90.6 95.1 94.4

98.7

99.5

98.8

2005 01 93.8 96.6 96.2

98.5

99.6

98.6

2005 02 94.3 96.8 96.7

98.7

99.6

98.8


74/76

2005 03 96.7 97.7 97 99.2

99.8

99.3

2005 04 96.2 97.5 97.3

99.8

99.8

99.8

2005 05 96 97.6 97.8

99.7

99.8

99.6

2005 06 98.6 98.4 98.8

99.8

99.8

99.7

2005 07 102 100.5 100.5

100.4

100.1

100.3

2005 08 103.3 100.6 101 100.5

100.1

100.4

2005 09 102.1 100.3 101.2

100.9

100.1

100.8

2005 10 103 102 102.6

101 100.3

101

2005 11 106 105.1 104

.7

100

.8

100

.4

100

.82005 12 108 107 106

.2100.7

100.6

100.8

2006 01 109.7 107.4 106.9

101.1

101 101.2

2006 02 109.3 107.3 107.2

101.1

101 101.2

2006 03 110 107.3 106.5

101.4

101.3

101.5

2006 04 111.9 107.7 107.5

101.9

101.4

101.9

2006 05 109.7 106.4 106.6

102.3

101.4

102.2

2006 06 109.8 106.4 106.8

102.4

101.5

102.4

2006 07 112.6 107.9 107.9

102.7

101.6

102.6

2006 08 111.7 107.2 107.8

102.8

101.7

102.7

2006 09 107.7 105.9 106.9

102.4

101.8

102.4

2006 10 107 106.8 107.4

102 101.9

102

2006 11 108.4 108.2 107.8

102 101.9

102

2006 12 109.4 108.4 107.8

102.2

101.9

102

2007 01 105.7 106.9 106.3

102.4

102.2

102.2

2007 02 106.9 107.2 107.1

102.6

102.5

102.5


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2007 03 109.4 108.4 107.5

103.2

102.8

103.1

2007 04 109.8 107.6 107.5

103.5

102.7

103.3

2007 05 110.2 108.2 108.3

103.9

102.8

103.6

2007 06 111.6 108.7 109.1

104.2

102.8

103.9

2007 07 112.9 108.7 108.7

104.4

102.9

104.2

2007 08 111.5 108.5 109.2

104.5

103.1

104.3

2007 09 114.3 110.1 111.1

104.8

103.1

104.7

2007 10 117.5 112 112.7

105.6

103.3

105.2

2007 11 121.8 114.4 114

.2

106

.4

103

.4

106

.12007 12 124.2 116.4 115

.9106.9

103.6

106.5

2008 01 127.7 118.9 118.4

107.8

104.5

107.6

2008 02 130 120.7 120.6

108.2

104.6

107.9

2008 03 133.5 123.3 122 109.3

105.1

109

2008 04 138.3 126 125.9

110.4

105.4

109.8

2008 05 144.2 129.2 129 111.9

105.9

111.5

2008 06 150.5 132.3 132.6

112.9

106.4

112.6

2008 07 149.2 132.7 132.7

113.6

107.2

113.4

2008 08 144.7 131.6 132.6

113.4

107.6

113.2

2008 09 142 131.6 132.8

113.5

108.2

113.5

2008 10 136 130.9 131.6

112.6

108.3

112.5

2008 11 132.1 131.3 131.3

111.8

108.6

111.7

2008 12 128.8 131.8 131.4

111.6

108.5

110.9

2009 01 130.1 132.5 131.9

111.6

108.8

110.9

2009 02 130.6 131.4 131.3

111.6

108.8

110.9


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2009 03 132.6 132.3 130.8

111.7

108.9

111.1

2009 04 130 129.2 129.1

112.4

109.1

111.5

2009 05 130.9 129 128.5

112.7

109.1

111.7

2009 06 131.5 127.7 128 113.1

108.9

112.1

2009 07 130.5 127.7 127.8

113.3

109.1

112.2

2009 08 133.3 128.8 129.9

113.4

109.2

112.4

2009 09 133.4 130.3 131.4

113.9

109.6

112.7

2009 10 137.1 132.4 133 114.3

110.1

113.1

2009 11 137.3 132.1 132

.1

114

.7

110

.2

113

.62009 12 137.9 132.8 132

.5115.2

110.8

114.1

Final (Economics.enigneering Sector)

Documents

Transcript of Final (Economics.enigneering Sector)