Weekly Economic Highlights: Pandemic having less impact on services

8.10.2021_Weekly Economic Highlights

Release date 8 October 2021

Pandemic having less impact on services

On Slovenia's Economy

  • As expected, exports of goods fell from EUR 3.5 billion (July figure) to EUR 2.8 billion in August, which is mainly due to the seasonal effect (manufacturing companies usually have collective holidays in August). Compared to August 2020, exports were a quarter higher. In one year, the value of exports of medicines, other medical and pharmaceutical products, aluminium, and electricity increased the most. This was followed by exports of passenger cars and petroleum products. We have to be very careful when interpreting this information, because some of the exported medicines, cars and petroleum products are not manufactured or obtained in Slovenia and only cross the border (implying rising imports and exports).

  • Rising prices of raw materials and semi-finished products, as well as growth in household consumption and investment, had a strong impact on nominal growth in imports of goods. In August, EUR 3.3 billion worth of goods were imported, which is 40% more than last year. Imports of organic-inorganic compounds, heterocyclic compounds, nucleic acids and their salts and sulphonamides (mainly semi-finished products for the domestic pharmaceutical industry) contributed the most to the growth in imports. This was followed by imports of medicines (domestic consumption and re-export), rolling stocks and equipment (SŽ purchases), telecommunications equipment and aluminium. Imports of petroleum products also increased sharply in one year but were still lower than in 2019.

  • More economic topics are below in the attachment.

On Global and European Economy

  • The September Global Composite PMI increased to 53 (from the August value of 52.5), which is mainly due to the rise in service activities. In the US, the euro area, the United Kingdom, India, Brazil and Russia, the indicator improved, deteriorating only in Japan and Australia. The component of input and output prices increased the most, which probably also implies a later rise in consumer product prices. In services, expectations for future operations improved significantly, while the dynamics of future employment strengthened slightly less.

  • Labour productivity in the euro area in manufacturing increased also in September, for the 15th consecutive month, but the slowest so far. Among the three largest euro economies, it strengthened only more strongly in Italy (manufacturing and services). In France, it declined, mainly due to a drop in productivity in manufacturing. In Germany, productivity in services declined, while in manufacturing it increased only slightly.

  • More economic topics for the EU and global are below in the attachment.

Must Read of the Week

Comment/Abstract: Robot taxes embody the more futuristic challenges of managing automation and legacy workers. As machines and artificial intelligence take on more roles that used to be performed by humans, policymakers and technologists are assessing the costs this transition imposes and what parts of society will pay them. On the revenue side, there should be appropriate expectations of what a tech tax can raise and over what period, on the scale of targeted retirement assistance or retraining programmes with measurable outcomes. Smaller and more innovative firms should not be asked to contribute disproportionately, particularly in legacy markets that are hard to break into, and they should be eligible for waivers and exemptions. Policymakers should stress that asking producers to help pay the costs of societal change is not immediately equivalent to stifling innovation, and they should make every effort to design policies in ways that protect against this type of side effect.

Forecast of the Week

  • Exports of services, Slovenia, August 2021 (Statistical Office of RS): 740 million EUR

Comment: We expect the export of services to reach 90% of the nominal value from August 2019. Spending of foreign tourists recovered in summer months but there was still present lack of guests from more remote distances.


Quote of the Week

“An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today.” (Laurence Peter)

Please see the enclosed attachment