GB: CBI Industrial Trends Survey

Tue Jan 23 05:00:00 CST 2018

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Level 12 14 17

The CBI's January Trends Survey suggests that UK manufacturing was doing reasonably well at the start of 2018. The more detailed quarterly survey also found a marked improvement in business confidence.

The headline monthly orders index weighed in at 14 percent, down 3 percentage points from its November/December mark but still comfortably above the 2017 average (9 percent) and slightly firmer than expected. Export orders (19 percent after 16 percent) firmed a little and were only just short of last year's high. Expectations for output over the next three months (24 percent after 13 percent) were robust and posted their best reading since September. However, inflation expectations deteriorated sharply and the domestic prices index (40 percent after 18 percent) was the highest since January 1984.

The quarterly business confidence index moved up from minus 11 percent to 13 percent but some firms warned about skills shortages. This could put upside pressure on wages.

In sum, the January results point to continued near-term growth of manufacturing output on the back of a combination of expanding domestic and overseas demand. Nonetheless, factory gate prices look set to rise faster than for some time and this alone will support speculation that the BoE may be forced to raise Bank Rate again before too long.

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