GB: CBI Industrial Trends Survey

Mon Dec 18 05:00:00 CST 2017

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Level 14 17 17

The CBI's new Industrial Trends Survey paints a notably upbeat picture of UK manufacturing in December.

The headline orders balance held steady at stronger than expected 17 percent and so equalled its highest reading since August 1988. The export side dipped 4 percentage points to 16 percent but this was still way above its long-run average (minus 18 percent). Past output (30 percent) was even more robust than in November's report (28 percent) but some slowdown was anticipated over coming months (13 percent) despite a slight shortfall on stocks (minus 3 percent). Even so, output prices (23 percent after 17 percent) were still expected to accelerate to their fastest rate since June.

The December findings suggest that the goods producing sector will start 2018 with plenty of demand already in the pipeline. Sterling weakness continues to underpin external orders but the domestic market also seems to be holding up surprisingly well. Consequently, if the pick-up in output prices materialises as expected, Bank Rate could be heading higher rather sooner than currently anticipated by most.

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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