According to the CBI, a rebound in industrial output in April was not reflected a more optimistic view of future production despite a modest gain in new orders.
The balance of firms reporting an increase in output over the last three months climbed from minus 15 percent to 1 percent. The orders balance (minus 11 percent after minus 14 percent) also showed some improvement and within this, exports (minus 13 percent) saw their highest reading since August 2015. However, expected production over the coming quarter (17 percent after 23 percent) was disappointingly weak. Expected prices (4 percent after minus 1 percent) firmed a little but remained soft.
The more detailed quarterly survey, released alongside the monthly report, showed overall business optimism slipping marginally (minus 5 percent after minus 4 percent) to within a whisker of its long-run average. This was well short of the January 2015 peak (15 percent).
In sum today's surveys suggest that the recent downturn in UK manufacturing provides a misleadingly soft picture of underlying trends. Nonetheless, while the second quarter may look rather better, there is little here to suggest that activity rates will be picking up significantly any time soon.
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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