GB: CBI Industrial Trends Survey

August 23, 2016 05:00 CDT

Consensus Actual Previous
Level -9.0 -5.0 -4

The total orders index slumped by an unexpectedly small 5 percent after July's minus 4 percent outturn, aided by stronger export orders that reaped from the depreciation of the sterling.

The monthly export orders balance jumped up to minus 6 percent to post a 2-year high after falling to minus 22 percent in July, as post-Brexit currency depreciation cheapened the price of British products to foreign buyers. For the same reason but with opposite effect on domestic prices, price expectations rose to 8 percent after 5 percent in July, reflecting anticipation of higher input costs by manufacturers.

Estimates of output over the last three months were pared down from July's 16 percent to 11 percent, but companies regained optimism about the future outlook, with the index of the volume output for the next months rebounding to 11 percent after falling to 6 percent in July.

In summary, the results of the August industrial trends survey are yet another indication in a growing series suggesting that the Brexit impact on the UK well as the Eurozone economy has thus far been much more benign than anticipated.

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.

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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