GB: CBI Industrial Trends Survey

Wed Jun 20 05:00:00 CDT 2018

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The CBI's June Industrial Trends Survey was mixed but in general, surprising bullish about the state of UK manufacturing.

The key orders balance weighed in at 13 percent, up fully 16 percentage points from May, comfortably above expectations and its highest reading since January. Within this, exports were up only a notch at 9 percent implying a solid advance in domestic demand.

There was also a sizeable bounce in past output where the sub-index jumped 26 percentage points to 29 percent. However, some of the good news here was tempered by a fall in the expected output index from 27 percent to 18 percent, a 3-month low. Stocks of finished goods (8 percent after 12 percent) similarly declined which may signal some loss of confidence. The outlook for prices (13 percent after 19 percent) was also seen somewhat softer.

Today's findings are moderately optimistic about prospects for manufacturing. The sector is far from booming but if this survey is to be believed, the nosedive in output recorded in April (1.4 percent on the month) should prove short-lived. The June PMI is likely to be reasonably respectable.

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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