GB: CBI Industrial Trends Survey

December 16, 2016 05:00 CST

Consensus Actual Previous
Level -5 0 -3

The CBI's December Trends Survey was again more upbeat than generally expected.

In particular, at 0 percent, the key orders balance was up 3 percentage points from November, comfortably ahead of the market consensus and, moreover, at its highest level in some twenty months. Somewhat surprisingly export orders weakened quite significantly (minus 15 percent after minus 11 percent) but this also implies that the gain in overall new business was due to the buoyancy of the domestic market. In any case, December looks to have been a good month for production with the output index (19 percent after 4 percent) climbing sharply. Firms are also optimistic about the near-term outlook with the expected production balance (21 percent after 24 percent) amongst the highest recorded during the year.

Meantime, even if the pound's Brexit vote-inspired decline has not impacted exports as much as it might have, it continues to bolster prices. Thus, average prices jumped fully 7 percentage points to 26 percent, their strongest reading since July 2011.

Taken at face value the CBI's November and December surveys suggest that October's disappointingly weak industrial production report should prove short-lived as the rest of the quarter seems set for a marked rebound.

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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