UK industry had a less than sparkling December according to the CBI's new Trends Survey. Although order books were not as weak as in November, past output was soft and expected to show no near-term improvement and firms again struggled to raise prices.
The overall orders book (minus 7 percent after minus 11 percent) was a little stronger than expected and comfortably above its long-run average (minus 15 percent). Exports (minus 18 percent after minus 29 percent) led the way and moved back above their historic norm (minus 20 percent) for the first time since August. However, output over the last three months (minus 3 percent after 4 percent) took a tumble and expectations (minus 5 percent after minus 6 percent) showed no significant improvement. Prices (unchanged at minus 2 percent) remained in the doldrums.
Today's survey results suggest that manufacturing was growing, but only sluggishly, at year-end. The sector's December PMI looks unlikely to show much change from November's disappointingly low 52.7 reading and with prices still under downward pressure, there is nothing here to support a near-term 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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