GB: CBI Industrial Trends Survey


Mon Oct 23 05:00:00 CDT 2017

Consensus Actual Previous
Level 9 -2 7

Highlights
The October CBI Trends Survey was surprisingly downbeat about manufacturing conditions. The headline orders index came in at a soft minus 2 percent, down from September's 7 percent and its weakest reading since November 2016.

The decline in the orders book was largely due to the domestic market but export orders also deteriorated (5 percent after 10 percent). Past output (14 percent after 17 percent) held up relatively well but expected production volumes (19 percent after 28 percent) fell to their lowest mark since April. Even so, expected prices (18 percent) were unchanged.

Growth of output and orders are still above their respective long-run averages but the broader quarterly survey signalled the first worsening in business optimism (minus 11 percent after 5 percent) in a year and that despite a moderately more favourable outlook for exports. Significantly, investment plans were limited by labour shortages with hiring intentions for the quarter ahead similarly comfortably stronger than their historic norm. Worryingly, investment plans for buildings (minus 30 percent) were the lowest since July 2009.

Today's survey results paint a mixed picture and will leave a good deal of uncertainty about prospects for a BoE tightening next week. A split vote remains the most likely outcome.

Definition
The Confederation of British Industry (CBI) produces a monthly survey (and a more detailed quarterly report) analysing the performance of UK manufacturing industry. This is the UK's longest running qualitative business tendency survey. Questions relate to domestic and export orders, stocks, price and output expectations with the main market focus being the domestic orders balance. The survey is seen as a loose leading indicator of the official industrial production data.

Description
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.

Frequency
Monthly and quarterly