According to the new CBI survey UK manufacturing had a dismal March but industry remains quite upbeat about the near-term outlook.
The closely watched orders balance was minus 14 percent, in line with the market consensus, a 3 point improvement over the February outturn and 1 point above its historical norm. Within this, exports (minus 19 percent) were unchanged implying that the modest gain was wholly attributable to a stronger domestic market.
In fact, the rise here was just as well because the balance for output over the last three months slumped some 15 percentage points to minus 15 percent with eight of the eighteen categories covered reporting declines. This suggests that the first quarter as a whole was somewhat disappointing although today's results appear to have been biased worse by the impact of localised flooding and mild weather on the food and drinks subsector. Still, production in the second quarter is seen recovering sharply with the balance of expectations jumping from 11 percent to 23 percent, its highest mark in a year. Elsewhere in the survey expected prices were put at minus 1 percent, up a couple of points versus February.
In sum, today's findings indicate a still struggling, but at least cautiously optimistic, manufacturing sector.
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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