GB: CBI Industrial Trends Survey

Tue Feb 20 05:00:00 CST 2018

Consensus Actual Previous
Level 12 10 14

The CBI's new Trends Survey points to some further limited cooling in future manufacturing activity. At 10 percent, the February headline orders balance was 4 percentage points short of its January mark and a little softer than market expectations. However, it was still comfortably stronger than the outturns posted over most of the first half of 2016 and well above its long-run average (minus 14 percent).

Export orders (10 percent after 19 percent) told a similar story but past output (24 percent after 21 percent) was actually slightly stronger. Still, output growth over the coming three months (16 percent after 24 percent) was expected to slow somewhat and a sizeable majority (25 percent) anticipate fresh increases in output prices.

UK manufacturing output has been on a respectable uptrend for a while now, posting gains every month since last May. Today's CBI results suggest that this progress was extended into February. However, there are signs that recent robust activity levels may not be matched over coming months while price pressures remain elevated. Such a problematic scenario would be nothing new to the BoE MPC but the Committee's apparent diminished preparedness to accommodate overshooting inflation means that another hike in Bank Rate is probably not far off.

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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