UK manufacturing ended the first quarter on a mixed note. Orders were disappointingly soft but recent output growth remained reasonable and production was seen picking up momentum over coming months.
The key orders balance dropped a surprisingly sharp 10 percentage points to zero, its weakest level since last October (but still historically firm). Within this exports (minus 26 percent after minus 8 percent) were particularly soft. However, at 22 percent, the majority anticipating a pick-up in output next quarter slipped only 3 percentage points from its February reading and remained well above its long-run average (7 percent). The past production balance (11 percent) was also down versus mid-quarter (17 percent) but, again, held comfortably above its long-term mean. Lastly expected factory gate inflation (4 percent) moderated from February's 10-month high (8 percent).
Today's report suggests that the goods producing sector has cooled somewhat but continues to expand at a healthy enough rate. Nonetheless, there is probably some downside risk to next week's March manufacturing PMI (February 54.1).
CBI conducts a monthly survey of senior manufacturing executives on trends in output, prices, exports, and costs. The CBI's quarterly Industrial Trends Survey collects data on topics like current business confidence, capacity utilization and investment intentions.
Started in 1958, this is the UK's longest-running private sector qualitative business tendency survey. The survey is used by policy makers along with those in the business community, academics and top analysts in financial markets. One of its key strengths is that it is released within ten days and prior to official statistics and includes data not covered by official sources. It is never revised. The data are also used by the European Commission's harmonized business survey of EU countries.
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