The CBI's November Trends survey was mixed and while moderately positive on recent developments in output, much less optimistic about the outlook. For financial markets the headline orders balance of minus 11 percent was just a point weaker than expected but at least 7 percentage points above its October reading.
Factory output over the last three months (4 percent) showed a marked improvement on last time (minus 4 percent) but, more significantly, expected production (minus 6 percent) saw its first negative print since November 2012. Orders were hit by weak exports (minus 29 percent) which also saw their lowest level in three years and continue to be undermined by the buoyancy of the pound.
Expected prices (minus 2 percent after minus 7 percent) were not quite as soft as at the end of last quarter but still suggest factory gate inflation will remain very subdued for some time yet.
Today's survey points to a relatively downbeat UK manufacturing sector entering the current quarter. Domestic demand is clearly holding up better than its overseas counterpart but the impact of sterling strength on both competitiveness and prices is becoming more of a problem for industry and economic policy with every passing day.
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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