In the first quarter of 2014, while the UK was proving its recovery, the US revealed a weather-induced 1% fall in GDP. The good news is that the American economy is expected to bounce back with 4% growth in the second quarter; a view supported by the manufacturing PMI which has strengthened from an already healthy 55.4 to 56.4. Part of this is due to a boost in car sales during May - a very different picture from the Russian market which, as a result of sanctions and political uncertainty, is predicted to fall by 20%.
In Europe, despite a slight improvement in car sales, the picture is not so rosy. Volatility may have fallen, but so have immediate growth prospects particularly in Germany (with PMI at 7 month low) and France which continue to struggle.
Remarkably, Spain is now moving into positive territory of 52.9. But, 25% unemployment remains a drag here as elsewhere in southern Europe. After a remarkably quiet period, the Eurozone seems to be close to a Japanese-style deflation: super-low interest rates indicating weakness rather than strength. This could have the effect of more money being printed.
Germany’s continued engineering strength has pulled it through recovery. What is interesting is that the UK is now following suit. For example, though sponsorship by the Advanced Propulsion Centre, F1 KERS technology is now being transferred to mainstream off-highway manufacturing. Frequently criticised for a lack of industrial strategy, this UK initiative could be an indicator for how the other European countries might re-envigorate their manufacturing bases.
As we move toward the “Internet of things” the acceptance of the internet as the means for creating competitive advantage will continue to grow. The need to both stand out from the crowd, while integrating systems from technical support through to sales closure are all vital factors. It is worthwhile noting that China now has over 600 million internet users and very high 'phone penetration. The internet is no longer a critical channel for the “advanced” economies only. With soccer's FIFA World Cup enthralling an estimated three billion global audience over the next month, it is little surprise that some of the largest digital brands are the players themselves - a fact not lost on the marketers.
OATS is responding to this shift in digital thinking with the launch of our new platform, EARL Fusion. This will transform the potential customer engagement for oil companies and deliver improved speed of product matching and presentation of options. We look forward to sharing these developments with you over the coming months.
In the meantime, if you would like to know more about our digital developments, or wish to comment on anything you have read in this month's Bulletin, simply contact us by e-mail or follow our updates on social media via Twitter @Oats_Ltd, Facebook and LinkedIn.
Sebastian Crawshaw
Chairman, OATS