Eve Economic Report for August - summer lull slowing.

The monthly Economic Report for August is out.


In summary:

The summer lull continues but is perhaps coming to the end.  Trade is down 49% since the February peak - Eve does seem to go through deep Trade cycles.

The player base, whilst less active, did manage to generate healthy surplus ISK which worked its way into the Plex market.



Items of note from Regional Activity

Trade - down 4%

Another decline in Trade, down 4% compared to July and down 49% from the February high.  The good news is that the rate of decline is falling: -23% in June; -9% in July; and now -4% in August.  Hence, i am expecting Trade to rise in September and so call an end of the summer lull.

To put this all in perspective, Total trade in July was 496 trillion ISK vs February of 977 trillion, that is a fall of 49%.

What we are seeing though is that the two larger Trade Hubs, Jita and Amarr, are holding their own whereas the 3 smaller Trade Hubs, Dodixie / Rens / Hek, are starting to fall away.

I.e. since Februray: The Forge (Jita) has fallen 49%; Domain (Amarr) has fallen 51% - so both the main trade hubs are down with the average.  However, Sinq Laison (Dodixie) has fallen 60%; Heimatar (Rens) has fallen 60%; and Metropolis (Hek) has fallen 56% - so it appears the other major trade hubs are falling faster.

In fact, during August The Forge (Jita) was only down 1% in Trade.

We will get a better idea if this trend is sustained as the year goes by - it may be the case that as Trade declines then volume gravitates towards the larger Trade Hubs of Jita and Amarr.  Or it may be the case that the other three Trade Hubs are slowly dying.  We will see.

If i just looked at Regions that did over 1 trillion ISK of trade (17 regions) then two are actually up since February: Aridia has risen 53%, helped by a massive 135% rise in August (High Sec, on the edge of Amarr space); and Vale of the Silent which has risen 7%.

Providence, which is holding up, only fell by 1% in August bring its total fall since February to 26% and Lonetrek, which had been holding up until July took a 19% dive on top of the 23% dive in July, bringing it down to -45% since February.

I have put the top 10 trade Regions for each of August, July, June, May and April below to allow readers to see how far trade has come back:

Below is the top 10 Trade Regions in August

	Trade
		Trillions
1	The Forge	363.5
2	Domain	55.4
3	Sinq Laison	17.0
4	Heimatar	8.9
5	Lonetrek	7.3
6	Metropolis	6.9
7	Providence	3.2
8	Essence	3.1
9	The Citadel	2.7
10	Tash-Murkon	1.8

Below is the top 10 Trade Regions in July

		Trillions
1	The Forge	367.9
2	Domain	59.7
3	Sinq Laison	19.4
4	Heimatar	10.5
5	Lonetrek	9.1
6	Metropolis	7.4
7	Essence	3.3
8	Providence	3.2
9	The Citadel	3.2
10	Tash-Murkon	1.9

Below is the top 10 Trade Regions in June

		Trillions
1	The Forge	399.2
2	Domain	67.1
3	Sinq Laison	21.2
4	Heimatar	12.4
5	Lonetrek	11.9
6	Metropolis	9.7
7	Providence	4.2
8	Essence	3.8
9	The Citadel	3.3
10	Tash-Murkon	2.5

Below is the top 10 Trade Regions in May

	Trade
		Trillions
1	The Forge	517.1
2	Domain	86.2
3	Sinq Laison	30.0
4	Heimatar	15.5
5	Lonetrek	13.0
6	Metropolis	12.9
7	Essence	5.2
8	The Citadel	5.2
9	Providence	4.5
10	Tash-Murkon	4.1

Below is the top 10 Trade Regions for April:

		Trillions
1	The Forge	597.7
2	Domain	99.4
3	Sinq Laison	34.8
4	Heimatar	19.1
5	Lonetrek	18.6
6	Metropolis	14.0
7	The Citadel	7.1
8	Essence	6.5
9	Providence	4.4
10	Tash-Murkon	4.1

Not much to say about the rankings in August other than to note that Lonetrek is in danger of slipping back down the rankings.  At one time it was challenging to be the number 4 Trade Hub but for now that is but a dream.

As a reminder to new players, the main 5 Trade Hubs in the order we know: The Forge (i.e. Jita); Domain (i.e. Amarr); Sinq Laison (i.e. Dodixie); Heimatar (i.e. Rens); Metropolis (i.e. Hek).

In the next 5: the expected Essence and Tash-Murkon are there, known secondary trade hubs.  But also Lonetrek and Citadel (both Regions that are one jump out of Jita) and Providence (null sec space that borders several highsec Regions: Domain / Tash-Murkon / Devoid / Derelik).

The dominance of The Forge (Jita) reigns supreme though - Jita shows no sign of losing its dominance.  It is no surprise that citadels in High-Sec are parking themselves close to Jita as they fight for its business.

Deklein (home region of the losing side in World War Bee) saw its second monthly rise in trade since March, with trade up 11% on top of the 20% rise in July.  Remains a shadow of its former self though with total Trade at 0.9 trillion vs 2.6 trillion back in February.

I tend to look at any trends since February to gain some sort of indication as to what has changed since World War Bee.  Looks like Arida has moved sharply up the rankings from mid 30s to number 17 and so is now one of the Regions that has over 1 trillion of Trade.  Immensea has moved from 42 to 26; and Vale of the Silent has moved from 21 to 13.

The big fallers have been Dekein from 13 to 18 - though is crawling back up the rankings; Oasa from 28 to 47; and Wicked Creek from 17 to 49.



Production - up 3%

Production rose 3%, which is nicely up 8% since February.  We saw a large rise in May to 145 trillion ISK on the back of Citadels followed by declines in June and July leaving us at 111 trillion ISK for August.

That all said, it is somewhat of a contradiction that Production is up 8% since February whereas Trade is down 49% over the same period.  My best guess remains that that either Corporations are mining and processing their own raw materials rather than buy them from the market, or that the purchases were made in prior months.

I have put the top 10 Production Regions for August, July, June, May and April below.


Top 10 Production Regions for August:

	Production
		Trillions
1	The Forge	21.4
2	Lonetrek	14.4
3	The Citadel	9.5
4	Domain	6.2
5	Sinq Laison	4.2
6	Providence	3.9
7	Tribute	3.6
8	Deklein	2.3
9	Malpais	2.1
10	Metropolis	2.1

Top 10 Production Regions for July:

		Trillions
1	The Forge	20.6
2	Lonetrek	14.4
3	The Citadel	9.6
4	Domain	5.8
5	Providence	3.9
6	Sinq Laison	3.9
7	Tribute	2.7
8	Malpais	2.2
9	Cobalt Edge	2.1
10	Vale of the Silent	1.9

Top 10 Production Regions for June:

		Trillions
1	The Forge	22.9
2	Lonetrek	15.0
3	The Citadel	11.2
4	Domain	6.7
5	Providence	5.1
6	Sinq Laison	4.3
7	Catch	2.8
8	Geminate	2.6
9	Malpais	2.6
10	Black Rise	2.5

Top 10 Production Regions for May:

	Production
		Trillions
1	The Forge	32.7
2	Lonetrek	19.6
3	The Citadel	15.1
4	Domain	8.9
5	Providence	5.4
6	Sinq Laison	5.3
7	Geminate	3.7
8	Catch	2.8
9	Tash-Murkon	2.6
10	Malpais	2.4

Top 10 Production Regions for April:

		Trillions
1	The Forge	19.6
2	Lonetrek	14.0
3	The Citadel	11.8
4	Domain	7.3
5	Sinq Laison	5.3
6	Providence	3.6
7	Metropolis	2.8
8	Geminate	2.5
9	Malpais	2.1
10	Tash-Murkon	2.0

A few notable changes:

Only matter to draw out in the rankings is that Deklein, home of the losing side in World War Bee, is now back in the top 10 Production rankings.

The Regions of The Forge and its neighbours Lonetrek and Citadel dominated - they were always big production centers but now take on the role as being where Citadels are being focused in High Sec to take business away from Jita.

For new players - The Forge remains the top slot - makes sense, many people will produce near where they buy the raw materials and/or intend to sell the finished items.

Domain and Sinq Laison are the other two major Trade Hubs - hence would expect Production to be there in volume as well.

Providence, is a Low Sec Region but borders several highsec Regions: Domain / Tash-Murkon / Devoid / Derelik and has a more inviting stance for players - hence we would expect to see it be up there in the Production rankings.

Some interesting moves in August production: Deklein, home of the losing side in World War Bee, increased 62% to 2.3 trillion compared to the May low of 0.7 trillion, not yet at the 4.0 trillion reached in March but a notable rise nonetheless; Delve rose 36% to 1.3 trillion which is a 120% rise from February; Esoteria is up 28% in August to 1.8 trillion which is a 85% rise since February; Tribute rose 35% in August to 3.6 trillion which is a rise of 182% since February.  I suspect we are seeing some Citadels being built in those Regions.

If i look at what is falling since February then i can't avoid to notice that the Trade Hubs of Domain (Amarr), Heimater (Rens), Metropolis (Hek) and Sinq Laison (Dodixie) are all down where as The Forge (Jita) is up.  So far, perhaps i can conclude that Citadels is taking Production away from all Trade Hubs except Jita and putting some into null/low sec.

Mining - down 7%

Mining was down 7% - again more inline with Trade - and now inline with February levels.

Below is the top 10 Mining Regions in August:

	mining
		Trillions
1	The Forge	1.4
2	Malpais	1.3
3	Lonetrek	1.1
4	Providence	1.0
5	Domain	1.0
6	Tash-Murkon	0.8
7	Branch	0.8
8	Metropolis	0.7
9	Everyshore	0.7
10	Vale of the Silent	0.7

Below is the top 10 Mining Regions in July:

		Trillions
1	The Forge	1.4
2	Malpais	1.3
3	Cobalt Edge	1.1
4	Providence	1.0
5	Lonetrek	1.0
6	Domain	1.0
7	Metropolis	0.8
8	Branch	0.7
9	Tash-Murkon	0.7
10	Sinq Laison	0.7

There are only three Regions where the mining value is over 1 trillion ISK: The Forge; Malpais; and Lonetrek.  The Forge and Lonetrek are suitably close to Jita and are key Production regions - so that makes sense we see plenty of mining there also.  Malpais, though, i will guess is popular because it is owned by PL and have plenty of players willing to mine it?

The big value movers upwards since February have been: Branch; and Malpais.

Cobalt Edge used to be a big upwards mover but halved in August back to February levels - not sure why.

Of the major Trade Hubs only The Forge (Jita), Domain (Amarr) and Sinq Laison (Dodixie) are in the top 10.

The Forge and Domain at the top given being major Trade Hubs - so people mining near where they intend to sell and Lonetrek being next to The Forge and itself a major production Region.

Providence is up there given it is nullsec space that is very connected to several High Sec Regions and has a more neutral policy to neutral players.

Destruction - down 5%

Destruction has resumed its downward trend from World War Bee with 31 trillion ISK destroyed in August vs the peak 35 trillion destroyed in March and April.

The big news is that The Forge has been knocked off the top ranking by The Citadel (a Region next to The Forge).  That last happened in May when The Forge was number 3.  For some reason, destruction in The Forge fell to a new recent low of 1.7 trillion vs the 2.0 trillion it has been running at before.

Perhaps that is the effect of Citadels causing gankers to be spread about more?  That is backed up by the % of Destroyed to (imported + exported) in The Forge has fallen from 0.16% to 0.13% - small number i know, but they make the point.

Below is the top 10 Destruction in August:

	Destroyed
		Trillions
1	The Citadel	1.8
2	The Forge	1.7
3	Lonetrek	1.5
4	Tribute	1.5
5	Black Rise	1.3
6	Catch	1.3
7	Providence	1.2
8	Pure Blind	0.9
9	Domain	0.9
10	Sinq Laison	0.9

Below is the top 10 Destruction in July:

		Trillions
1	The Forge	2.1
2	Black Rise	2.0
3	Lonetrek	1.9
4	The Citadel	1.6
5	Providence	1.3
6	Immensea	1.2
7	Sinq Laison	1.1
8	Pure Blind	1.0
9	Metropolis	1.0
10	Vale of the Silent	1.0

The top table is the top 10 Destruction in June:

		Trillions
1	The Forge	2.0
2	Lonetrek	1.8
3	Black Rise	1.8
4	The Citadel	1.4
5	Providence	1.3
6	Querious	1.0
7	Domain	1.0
8	Catch	0.9
9	Vale of the Silent	0.8
10	Sinq Laison	0.8

The table below is the top 10 Destruction in May:

	Destroyed
		Trillions
1	Lonetrek	2.7
2	The Citadel	2.2
3	The Forge	1.9
4	Domain	1.4
5	Black Rise	1.4
6	Providence	1.2
7	Sinq Laison	1.1
8	Metropolis	1.1
9	Catch	1.0
10	Querious	1.0

The table below is the top 10 Destruction in April:

		Trillions
1	Lonetrek	3.0
2	Pure Blind	2.3
3	The Forge	2.3
4	The Citadel	1.9
5	Black Rise	1.6
6	Domain	1.4
7	Tribute	1.1
8	Deklein	1.1
9	Metropolis	1.1
10	Sinq Laison	1.1

Destruction is one of those stats that does see a reasonable amount of change in the rankings.  As you would expect, the major Trade Hubs are right up there most of the time (The Forge, Domain, Sinq Laison) as well as the two regions around The Forge (The Citadel and Lonetrek).  Black Rise is always a feature in the top 10 - it is a high sec Region, with Low Sec parts, linking mostly into other high sec regions and Cloud Ring.  Seems to be heavily contested all the time.

That all said, i don't follow the battles too closely hence i am not too aware of why certain regions contain all the destruction.

Immensea, which made an appearance in the top 10 in July, fell way down the list whilst Tribute made a long awaited return to the top 10, last seen in April.

Imports and Exports

I normally watch the Imports and Exports as an indicator on the travel of goods or, more recently, the movement of war.

Now, here is an interesting note: whilst Trade was down, imports & exports was up 15.4%.  Seems people where clearly moving stuff around.  It rose to levels not seen since World War Bee.

The notable risers for exports were: Aridia up 182% (though this may be reversing what was a very large import number in July); Delve up 170%; Khanid up 59%; Kor-Azor up 51%; Pure Blind up 49%.

Whilst the notable new net large net importers where: Delve; Tribute; and Venal.  I am not sure why these places should suddenly see a spike in net imports though i assume Citadels may have something to do with it.  Certainly Delve and Tribute also saw a large increase in Production also.

Worth also noting that Deklein, home of the losing side in World War Be, saw some net exports this month following 3 months of net imports - the victors moving out?



Items of note in the Sinks and Faucets

Well, in August we had a small outflow of ISK from the game to the tune of 500bn ISK.

Nothing to do with the existing player base - they were as active as before and generated a healthy 26.3 trillion inflow of ISK into the game.

It was the £26.8 trillion ISK leaving the game due to accounts retiring that caused the net outflow.

Infact, during June / July / August the ISK leaving the game due to accounts retiring has been 20 - 26bn which is a sharp rise on the c10bn we say in Feb / March / April / May.

Now, before we press the panic button of "players leaving Eve" this could represent higher wealth players leaving the game.  Personally, i am putting it down to perhaps a fall out from World War Bee that is seeing more than the normal volume of accounts retire or with the launch of Citadels there is something that the data is not picking up (can't think of what though).

Looking at the month on month changes:

Transaction taxes and Broker fees fell by 4% each to 7.5 trillion and 10.2 trillion respectively which is inline with the fall in Trade.

Worth noting the effects that the changes in the tax system have had: go back to February and Transaction tax cost us 9.8 trillion vs Broker fees of 5.9 trillion.  Following the tax changes that relationship has now changes with Broker fees costing more.

Recall that on 27 April 2016, Transaction Tax (a tax on items sold) went from 1.5% to 2.0% and Broker Fees (a tax on orders placed on the market for future fulfillment) went from 1% to 3%.

Now, the total of Broker fees and Transaction taxes in February was 15.7 trillion for Trade that was 977.1 trillion.  In other words, the cost of doing business was 1.6% - now, i know that a broker fee incurred in one month need not relate to trade done in that month but it is a good approximation.  Roll forward to August and the cost of doing business has more than doubled to 3.6%.  in fact, trade has fallen 49% since February but Broker Fees + Transaction Taxes have risen by 13%.  I might have once mentioned that Eve was going Communist . . . . . . . . !  Now, i am not asking for sympathy to be directed at the multi-billionaires and trillionaires in Eve - but these higher taxes are either dealt with by higher prices or lower profits.  I am putting my money on higher prices.

Blueprints fell 4% to 4.3 trillion - back towards a more normal level, seems like Citadel blueprint buying is working its way out of the system.

Skills are down 4% to a new low since February of 8.5 trillion - no real view why.

Bounty prizes fell 7% to 39.5 trillion - to me, bounty prizes are a measure of player activity unless there is a major war going on somewhere.  Reconciles well this month with the 7% fall in mining and 5% fall in destruction.  I find that the direction of Mining is normally the same as the direction of Bounty Prizes (though has no correlation with the direction of Trade).  From that, i conclude that player activity was lower in August.

Incursions payouts rose 14% to 10.4 trillion - getting back to the more normal peace time incursion activity.

Insurance inflow (5.5 trillion inflow less 2.4 trillion outflow) is running at more normal levels after World War Bee.  For what it is worth, i have never seen a month where the insurance paid out has been exceeded by the insurance premiums collected.  Which ever part of Eve runs the insurance businesses, they are sure in financial trouble!

Project Discovery hitting a new low of 75.8 billion inflow.  It started at 340 billion back in March and has been on decline ever since.


One odd item of note, there is a small sink called "Celestial", i have no idea what it is but it has a suspiciously round numbered outflow each month: Feb = 74.7 billion (i.e. an exact 74,700,000,000); March = 45.0; April = 2.7; May 8.1; June = 18.0; July 3.6; August 3.6.

Items of note in the Money Supply

Nothing to say this month other than money supply fell back after a welcome rise in July.  There was nothing of note during the month either.

The greatest inflow of ISK into the game as a % of the prior day's ISK was on 17 October 2014 when 4.9 trillion ISK came into the game (=0.66% of the prior day's ISK in the game).  And indeed 18 October 2014 was the third largest day with 4.1 trillion ISK coming into the game.  Not sure why this would be: Plex went over 800m though that itself would not cause ISK to flow into the game; may also relate to SOMER Blink reimbursing prior deposits (see paragraph below).

The greatest outflow of ISK from the game occured on 20 August 2014 when a massive 32.7 trillion ISK left the game (=4.3% of the prior day's ISK in the game).  Most likely to do with the banning of SOMER Blink from the game on that day.  To put this in perspective, the next largest outflow of ISK was on 8 January 2016 when 4.8 trillion left the game (=0.52% of the prior day's ISK in the game) - again, most likely due to a banning event: The Latest IWANTISK Ban Wave.  Seems at least to be a pattern to the major outflow days = banning days.

Mapping all that onto Plex Prices

I greatly suspect players, like myself, use surplus ISK generated each month to buy Plex.  When i say "surplus" i of course mean surplus to all other requirements - at the end off the day, ISK sitting in my wallet will never grow.  It should either be about to be invested into my business or should Buy Plex.

Normally, there is 20 - 30 trillion of surplus ISK generated which, through the mechanisms of trading, makes its way nicely up to the business owners and bankers in Eve.  When i say surplus ISK, i mean the difference between the Faucets and the Sinks.  The ISK that leaves with retiring players is not a factor in all this - though the absence of those retiring players may become a factor in future periods.

They then park some of that in Plex.  That is what makes Plex an inflation hedge - where inflation is defined as money supply.  That is, the rising amount of ISK in Eve.

As a rule, surplus ISK is normally generated by existing players each month.  However, we have had three recent events which have disrupted that flow.

Firstly, World War Bee, i suspect, will have seen a higher than normal selling pressure to finance the war.  For a few months that extra ISK generated went into financing the war and i suspect hoarded reserves of Plex were sold to help out.  That i suspect is now largely over.

Secondly, Citadel building will also have seen a higher than normal selling pressure to finance the cost of building Citadels.  That appears to be scaling back to more of an ongoing expense rather than the rush we saw recently.

Thirdly, the rise in Transaction Taxes and Broker Fees has added a further 5 trillion of additional ISK sink to Eve.  Worth noting that it was an additional 15 trillion ISK sink until players discovered "off-shoring".  That is here to stay though good to see player innovation minimizing its affect.

The point here is that the recent headwinds to ISK generation are now lessening, indeed almost gone, such that we are again generating surplus ISK and so Plex rises have started to rise again in response.  When those headwinds were the strongest in April and May we saw ISK leave the economy and so Plex prices fell.  Prior to those months, ISK only left Eve on three prior occasions - August 2014, April 2014 and March 2014.