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Sunday, 9 October 2016

Eve Economic Report September 2016 - Activity up, Trade down

The monthly Economic Report for September is out.


In summary:


Activity is rising but Trade continues to fall.

Mining and Bounty Prizes are all up = activity rising amongst the player base.  But Trade and Production is down = less economic activity.

ISK in the game is rising again = rising Plex prices.

Citadel market share of the market is rising - it is at least 9% though i greatly suspect it is nearer 20%.

I would expect the rising activity to lead to rising Trade in October.




Player to Player Fees


This is a new piece of information.  Since PoCos players have been able to collect taxes from other players for the use of player owned facilities but the launch of Citadels and taken this a step further.  In September 1.7 Trillion ISK was paid from one Character to another in the form of Citadel Broker Fees (901 billion), Planetary Export Taxes (381 billion), Reprocessing Tax (117 billion) etc.

Main points of interest for now are that:

Broker fees of 901 billion compares to NPC broker fees of 9.5 trillion.  Hence, for now, we can say that Citadels command about 8.7% of the market (if we measured the market by the value of items placed on the market to Sell plus the value of Buy order placed on the market to be fulfilled).  However, worth remembering that in most Citadels the Broker fees are priced very low to attract traders - hence i suspect this 8.7% market share is understated.  I may have more on this in a later post - i can see how it could be as high as 20% but that has a few assumptions in it!

Planetary Export tax of 381 billion and Planetary Import tax of 76 billion represent about 65 - 70% of the total tax collected which, as we would expect, shows that the player owned PoCos are almost everywhere.  Given NPC tax still applies at player owned PoCos (hence, the tax share of player fees can never get to 100%) i suspect we can be confident that almost every planet now has a player owned PoCo orbiting it.

Reprocessing tax of 117 billion represents 67% of the total reprocessing tax.  Now, for this one i need to work out if there is any NPC take at player owned stations, if not then it seems fair to assume the most Reprocessing is done at player owned stations (and i suspect player owned station tax is lower so that 67% understates the true market share).

More to follow here over the coming months, notably keeping track of Broker fees as a way of gauging Citadel Trade market share.



Items of note from Regional Activity

Trade - down 3%


That surprised me, trade fell 3% to 479 trillion ISK - i had thought trade would rise in September.  Trade is now down 51% since February.  In the last seven months only April saw a rise in trade (of a mere +1%).

The top 10 trade regions are below:

Trade
Trillions
1 The Forge 351.0
2 Domain 52.8
3 Sinq Laison 17.4
4 Heimatar 8.5
5 Metropolis 6.7
6 Lonetrek 6.6
7 The Citadel 3.2
8 Essence 3.1
9 Providence 3.1
10 Tash-Murkon 1.8


The Forge (Jita) remains dominant followed by the trade hubs of Domain (Amarr), Sinq Laison (Dodixie), Heimeter (Rens) and Metropolis (Hek).  Lonetrek remains in contention to take over from Hek - go back a few months and it was challenging to be the number 4 trade spot.  As usual, Citadel, Essence, Providence and Tash-Murkon make up the rest of the top 10.

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).

Providence is Low Sec space that borders several highsec Regions: Domain / Tash-Murkon / Devoid / Derelik.

To put The Forge (Jita) into perspective, 73.2% of all Trade is done there.  And that has been on a rising trend since March.  So far, at least, Citadels is not taking trade away from Jita.

The other trade hubs though are a different matter.  Domain (Amarr) has 11.0% of all trade but that is on a declining trend.  It was 11.6% in March.  Sinq Laison (Dodixie) has 3.6% of all trade vs 4.2% in March.  Heimeter (Rens) has 1.8% of all trade vs 2.3% in March and Metrolpolis (Hek) has 1.4% of all trade vs 1.7% in March.

The only other Region commanding more than 1% of all trade is Lonetrek at 1.4% though it is also seeing a falling share over time.

I don't believe the falling share of the other Trade Hubs is due to Citadels, rather i suspect it is a feature of declining trade which penalizes the central trade Hub (Jita) last.  In a universe of declining trade, what is left will gravitate towards Jita as Buyers and Sellers seek each other out.

Transaction taxes rose 3% - given Trade fell 3% then this suggests that a higher proportion of Trade is done from NPC stations vs player owned Citadels in September.

As an aside, Transaction Taxes used to sit at 1.00% of the Trade value (which was the minimum possible with full skills) but with the changes to the tax system now sit at 1.61%.  I am not sure why the current rate sits at 1.61% when Accounting Level 5 can get it down to 1.00% and given the rate effectively paid before the changes was at the minimum.  I will pick this up in a later post - but it does indicate that Citadel Trade is not being picked up in this data.  If this was the case then Citadel Trade would represent 38% of all Trade in Eve (feels too high).

Broker Fees fell 7% - which indicates either more items being put on the market to Buy and Sell in Citadels or the total value of items being placed on the market to Buy and Sell has fallen.  I favour the latter explaination.  Broker fees used to be 0.60% of the Trade value but now are 1.98%.

However, the Transaction Tax rate the Broker Fee rate does confirm that the Trade Value quoted in the stats is the Sales values only (and not the total sum of the Selling + Buying, which you could argue would be double counting).


16 Regions did over 1 trillion ISK of trade in September, down from 17 in August and a massive 27 in February.  Aridia was the Region that dropped out in September though, to be fair, it was only in the Trillion ISK club for August.

Regions that have fallen out since February are: Black Rise; Branch; Deklein; Derelik; Devoid; Kador; Khanid; Kor-Azor; Pure Blind; Querious; and Wicked Creek.  Some of these will be war related, others i am not sure of.

Deklein, the home world to the side that lost World War Bee, is back at a new low of 535 billion ISK having been back on the rise for the prior two months.

Nothing noteworthy in terms of trends this month, no Region really lost or gained relative to its own history.



Contracts: another way of measuring the Economic activity in Eve is to look at the volume of contracts placed.  If i assume 10,000 ISK broker fee per contract then in September there were 17.5m contracts placed which is a 1.0% decline on August though up 2.7% since February.  The peak number of contracts occurred in April when 22.3m contracts were placed.


Office Rental Fees: office rentals fell 13% to 436 billion ISK, a new low since i have been watching the numbers since February.  In part, i suspect, due to the fall in Trade and so corporations pulling out of Trade Hubs such as Rens, Hek and Dodixie and also due to traders moving to the Citadels perhaps.




Production - down 6%

Production fell 6% to 105 trillion ISK of items manufactured, back to about February levels.  Seems that the Citadel manufacturing is slowing down.

It still interests me that Production is essentially flat since February but Trade is down 51%.  My best guess remains that that either Corporations are mining and processing their own raw materials rather than buying them from the market, or that the purchases were made in prior months.

Of note, Manufacturing costs as a % of the Value manufactured is running at 1.86%.  I.e. in September 105 trillion ISK of items were manufactured which cost 1.9 trillion ISK in manufacturing fees. 

The top 10 Production Regions for September are below:



Production
Trillions
1 The Forge 18.7
2 Lonetrek 11.9
3 The Citadel 10.1
4 Domain 5.9
5 Sinq Laison 3.9
6 Providence 3.6
7 Delve 3.5
8 Tribute 3.3
9 Geminate 2.1
10 Deklein 1.9

Delve has been gathering momentum.  Used to sit in the 30s before rising into the 20s and now into the top 10.

Deklein, the home region of the losing side in World War Bee, is for the second month back in the top 10.

Everyshore has been falling down the rankings and is now in the 30s vs its prior solid position in the 20s.

Metrolopolis (Hek) sits just outside the top 10 whereas Heimatar (Rens) is on the 20s despite being number 4 on the Top 10 Trade list.


The Regions of The Forge and its neighbours Lonetrek and Citadel dominate - 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 (Amarr) and Sinq Laison (Dodixie) 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.

If i compare September to February: Delve is up 487% to 3.5 trillion ISK of items; Esoteria is up 48% to 1.4 trillion; Fountain is up 65% to 1.1 trillion; Perrigen Falls is up 140% to 1.1 trillion; Tenel is up 49% to 1.1 trillion; The Spire is up 330% to 1.0 trillion; and Tribute is up 155% to 3.3 trillion.



Mining - up 5%

Mining rose 5% to 24.4 trillion ISK which is slightly up on the February level.



Below is the top 10 Mining Regions in September:

mining
Trillions
1 Malpais 1.4
2 The Forge 1.4
3 Delve 1.4
4 Lonetrek 1.1
5 Providence 1.1
6 Domain 1.0
7 Tash-Murkon 0.8
8 Metropolis 0.7
9 The Citadel 0.6
10 Everyshore 0.6

Delve shot up from its normal position in the 40s to number 3 - note it also went into the top 10 in Production as well, i suspect a connection there and also a hint why Trade can be down since February but Mining and Production up since February => players and corporations are mining their own raw materials for use.


The Forge (Jita) was knocked off top slot by Malpais - though nothing special there, those two Regions are generally fighting for the top slot.
There are now five regions where mining is over 1 trillion ISK compared to 3 in August and three in February.  That suggests to me that game activity is back on the rise.  The new regions this month were Delve and Providence.





Destruction - down 2%

Destruction fell 2% to 30.4 trillion which is a new low since i started watching the numbers in February and continues the downward trend since World War Bee.

Insurance payments to players is back to the more normal 17% of the value of items destroyed.  During the height of World War Bee it rose to 23% given players were flying into battle knowing the end was nigh.  I.e. in September 5.1 trillion ISK in insurance was paid to players.

As an aside, the insurance payments players make each month is about 8% of what is destroyed.  i.e. in September players paid 2.4 trillion in insurance fees.

Whoever runs the Eve Online insurance business is making a 3 trillion loss per month during peace time and a massive 4.5 trillion loss per month during wars.

Below is the top 10 Destruction in September:

Destroyed
Trillions
1 The Forge 2.1
2 Lonetrek 1.8
3 The Citadel 1.6
4 Catch 1.6
5 Black Rise 1.5
6 Pure Blind 1.3
7 Providence 1.2
8 Sinq Laison 0.9
9 Domain 0.9
10 Fountain 0.9


Forge has regained its top slot.


Delve has risen to just below the top 10 compared to its more normal position in the 20s - a reflection of the higher level of mining and production done in that Region over recent months.


Fountain is back in the top 10 having spent a number of months in the 20s.




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.

That said, imports (and exports) fell 6.6% to 6,732 Trillion ISK which remains a healthy level.

Whilst Trade may be down 51% since February, Imports / Exports are up 17%.

Looking at trends: There appears to be a clear sign of items being moved into Delve (note also the rise in Production in that Region), Tenel and Tenerifis.  Whereas there appears to be a clear sign of items being moved out of Branch.



Items of note in the Sinks and Faucets

Sink = ISK leaving the game (i.e. Brokers Fees); Faucet = ISK coming into the game (i.e. Bounty Prizes).

In September there was an inflow of ISK into the game of 11.4 trillion ISK.  The amount of ISK in the game is 967 trillion ISK though below the peak March level of 972 trillion ISK.

The September increase was due to slightly more ISK flowing in from the faucets and much less ISK retiring from the game (player accounts closing).

ISK leaving the game was still high at 18.5 trillion compared to the more normal 10 trillion ISK.  June / July / August saw over 20 trillion ISK leave each month - i am not sure if that is the summer lull or players leaving post World War Bee.

The faucet growth benefited from a 12% increase in Bounty Prizes to 44.1 trillion ISK, which is a new high since i have been watching the numbers in February.  Again, another indication that activity is on the rise.


Going through the Sinks:

Transaction taxes were up 3% and Broker fees down 7% - see the Trade Section above where i discuss those.

Blueprints fell 3% to 4.2 trillion ISK which continues to decline since the introduction of Citadels but remains above the February level of 3.4 trillion.

Skills were flat at 8.5 trillion ISK but remains at the lows - i am assuming players are diverting ISK generation to selling Skills to players that are, for now, buying the more lower valued skill books.

Project Discovery made its first rise in a long time to 91.0 billion inflow.  It started at 340 billion back in March.

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; September 9.9.



Items of note in the Money Supply

Nothing to say this month, money supply is back on the rise.

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.

The players then park some of that ISK 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.  To put the changes in the tax system into perspective: in February 15.7 trillion ISK was spent on Transaction taxes and Broker fees as a result of 977 trillion ISK of trade; in September 17.2 trillion ISK was spent on Transaction taxes and Broker fees as a result of a mere 479 trillion ISK of trade.

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.

3 comments:

  1. Fantastic review of the economic data, thanks! I look forward to seeing how the Nov expansion and following months changes the numbers

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  2. Great review, though I am a little confused why you kept calling providence a low-sec region: it isn't one. It's a null sec region. As for mining/production, I didn't see you touch on how mineral stockpiling is affecting the mining production disparity. A lot of us are setting aside very large amounts of minerals and pi right now

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