GB: CBI Industrial Trends Survey

Wed Mar 21 06:00:00 CDT 2018

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Level 8 4 10

The CBI's March Trends Survey was relatively subdued. In particular, the orders balance dropped a further 6 percentage points to 4 percent, its lowest mark since last October and comfortably short of market expectations.

Export orders (10 percent) were unchanged but while past output (16 percent after 24 percent) remained comfortably in positive growth territory, it still signalled some deceleration from earlier in the quarter. Moreover, this cooling is expected to continue over the coming three months (13 percent after 16 percent). In part, this may reflect a rise in stocks of finished goods (20 percent after 5 percent) which climbed above their historic norm (13 percent).

Meantime, inflation pressures similarly eased somewhat with expected prices (18 percent after 25 percent) notably softer than last month even though they remained well above their long-run average (2 percent).

As of January, UK manufacturing output had achieved an unbroken upswing lasting an impressive nine months, albeit more recently at a somewhat slower pace than seem over much of last year. Today's survey results suggest that first quarter production will again contribute positively to real GDP growth but warn that the boost is likely to fall short of last quarter.

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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