GB: CBI Industrial Trends Survey

January 25, 2017 05:00 CST

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The CBI's January Trends Survey suggests that UK manufacturing made a solid, and probably rather stronger than expected, start to 2017.

The headline orders balance rose from 0 percent in December to a surprisingly robust 5 percent, its best reading in nearly two years. Within this, export orders (minus 9 percent after minus 15 percent) also improved significantly. Meantime, although output last quarter (15 percent after 19 percent) cooled versus year-end, expectations for this quarter (26 percent after 21 percent) were the most bullish since September 2014. Lastly, planned price increases (28 percent after 26 percent) similarly picked up from an already firm level to a new multi-year peak.

With the more detailed quarterly survey also showing business optimism (15 percent after minus 8 percent) climbing to its highest level since January 2015, today's results bode well for near-term manufacturing prospects.

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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