CBI: Manufacturing still doing well
Manufacturing is still the economy’s bright spot, with the CBI’s Industrial Trends survey showing output rising – and orders too, which bodes well for the future.
Most figures in the survey are balances – they show the difference between those giving positive and negative replies – and they look good:
|Last 3 months||Next 3 months|
|Volume of total new orders up||+18%||+4%|
|Volume of domestic orders up||+ 9%||-3%|
|Volume of export orders up||+ 13%||+18%|
|Volume of output up||+ 16%||+17%|
The news on investment intentions is also good, with a +22% net result for more product and process innovation, +19% for training and retraining and +10% for plant and machinery. The net balance for buildings is just +1%: another indicator that the mini-boom in construction is ending.
From a trade union point of view it’s encouraging to see a plus 8% result for ‘numbers employed’ over the past 3 months and +2% for the next three. One worrying element is the view forward for domestic orders, which suggests that manufacturers have some of the same worries as me about the future of domestic demand. They may be responsible for the fact that while the net balance for optimism about exports over the year ahead is +18%, for “the business situation” it is +7%.
But really, the more important fact is that these are positive figures; they’re something to give us hope for the future when a lot of indicators are rather depressing. Some news that suggests exports may continue to be healthy came from a survey showing German business confidence at a record high – British firms desperately need major export markets to be healthy.
The CBI points out that the survey shows that manufacturers have felt they had no alternative but to pass on the increased cost of their inputs to their customers (many held down prices during the recession and simply can’t carry on with this.) This is going to add to inflationary pressures, which will worry the Bank.