| Consensus | Actual | Previous | |
|---|---|---|---|
| Orders Balance | -20% | -33% | -23% |
Highlights
The CBI's new trends survey found orders falling surprisingly sharply in May. At minus 33 percent, the headline balance was some 13 percentage points short of the market consensus and almost as far below its minus 23 percent March print. This was it weakest reading since November last year and compares with a long-run average of minus 13 percent.
However, past output (14 percent after 3 percent) posted a respectable gain and growth is expected to remain positive, albeit slow, over the coming three months (7 percent). Expected selling prices (15 percent after 27 percent) eased for the first time in five months while stock adequacy (14 percent after minus 1 percent) was broadly in line with its historic norm.
Even so, the ongoing weakness of demand may make for some downside risk to May's flash manufacturing PMI (data due Thursday) and could boost hopes for a cut in Bank Rate as soon as next month. However, much more important will be tomorrow's April CPI update, in particular regarding inflation in services. More generally, today's report trims both the UK RPI and the RPI-P to 40 but overall economic activity is still running well ahead of market forecasts.
However, past output (14 percent after 3 percent) posted a respectable gain and growth is expected to remain positive, albeit slow, over the coming three months (7 percent). Expected selling prices (15 percent after 27 percent) eased for the first time in five months while stock adequacy (14 percent after minus 1 percent) was broadly in line with its historic norm.
Even so, the ongoing weakness of demand may make for some downside risk to May's flash manufacturing PMI (data due Thursday) and could boost hopes for a cut in Bank Rate as soon as next month. However, much more important will be tomorrow's April CPI update, in particular regarding inflation in services. More generally, today's report trims both the UK RPI and the RPI-P to 40 but overall economic activity is still running well ahead of market forecasts.
Market Consensus Before Announcement
The headline sales balance is expected to edge up from minus 23 percent in April to minus 20 percent.
Definition
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.
Description
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.
Frequency
Monthly and quarterly
Frequency
Monthly and quarterly
