The CBI's April Trends survey suggests that UK manufacturing was in a less upbeat mood at the start of the new quarter, reflecting slower growth of current and expected output together with a weaker than anticipated orders book.
Total orders weighed in at 1 percent, up versus March's flat reading and still well above their long-run average (minus 16 percent) but well short of levels seen earlier in the year and in 2014. Within this, exports (minus 11 percent after minus 26 percent) actually improved quite sharply following March's slump but still failed to recover their February mark (minus 8 percent). Past output growth (4 percent after 11 percent) also moderated and expectations for the next three months (16 percent after 22 percent) posted their weakest level since the start of the year.
Moreover, anyone looking for signs of building inflationary pressures will have been disappointed as 3-month ahead factory gate price expectations (minus 3 percent after 4 percent) were pared back significantly.
In fact the more detailed quarterly survey released alongside the monthly report found overall business sentiment sliding some 12 percentage points to 3 percent, its lowest reading since the beginning of 2014.
In sum today's results point to a softer tone to April's manufacturing PMI, due Friday. The sector is still expanding but growth rates have clearly eased and any meaningful upturn in selling prices still looks some way off. There is nothing here to pull forward the timing of any BoE tightening.
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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