CBI's October Trends survey was much weaker than expected with the headline orders index slumping fully 12 percentage points to minus 17 percent.
Significantly, within overall orders, exports improved to minus 6 percent from minus 10 percent suggesting that domestic demand was particularly soft. Within the more detailed quarterly employment survey, there was a net decline in employment (5 percent) which, although still above its long-run average, was its worst reading since April 2010. Even so, output over the past three months (9 percent) was at least positive, while business optimism (minus 8 percent after -47 percent) was much less negative than its July trough. Prices (8 percent) were unchanged from their previous reading but well above their long-run average (minus 3 percent) providing further reason for supposing inflation will be heading north next year.
Overall, the results are hardly strong but they do suggest that sterling's depreciation since the Brexit vote should start to come through in the hard export data sooner rather than later. This could well be vital to sustaining a respectable rate of economic growth if domestic demand slows as hinted at in most recent consumer and business surveys.
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.
Monthly and quarterly