MoneyWeek magazine issu no 446

Who's getting rich now?

31 July 2009 / Issue 446

Cash in on the rise of emerging market giants... PLUS:

  • The best way to buy into timber
  • The 1980s can save us from recession
  • Michael Winner's big confession


A brave stab at optimism

You could, if you wanted, put a good gloss on the Confederation of British Industry (CBI) sales data for July. The FT had a go, noting that “shops reported one of their best months in a year”, and suggesting that “punters appear to be returning to pubs”.

But in fact the numbers are as dire as usual. Sales volumes fell for 47% of stores in the survey and rose for 32%. That’s a balance of minus 13. Better than June’s –17 and the best number since last June, yes. But still a figure that represents a big fall in overall sales, despite the boost retailers got from the mini-heatwave at the start of the month.

I wouldn’t call that good news. Instead, I’d compare that minus 13 to the long-term average for the survey of plus 18 and call it pretty awful. Note too that ‘the punters’ weren’t actually drinking more beer. All that happened is that the rate at which they were drinking less declined: in-pub beer sales fell by 4.5% year-on-year in July (again despite the heat wave).

I’m still hearing a lot about the V-shaped recovery. But look at numbers like this and it’s hard to see how so many people can have so much faith in it. As we may have said before, a slowing rate of decline isn’t the same as a real rebound. I’m still betting on a gently sloping L-shaped recovery.

• Read the full editor’s letter here: A brave stab at optimism