Bank of England Agents’ Summary of Business Conditions, September 2015: The Bank of England Agents’ report this month shows that manufacturing output growth has been modest overall, partly reflecting weak export demand due to the appreciation of Sterling and subdued world demand. Automotive and Aerospace companies continued to report solid output growth, but the impact of weakening demand from the oil & gas sector has fed through related supply chains, even though UK oil & gas output has held up reasonably well as previous investment in capacity came on stream.
In export markets, the strength of Sterling against the Euro has led to increasing competition from European manufacturers both in their markets and in third countries. Some contacts reported that export volumes to continental Europe had started to decline and demand from China has also weakened for a range of goods, including capital equipment; exports to the USA have, however, continued to grow.
There was little change in the level of capacity utilisation which remains slightly below “normal” for manufacturing companies overall, although in the Automotive and Aerospace industries companies were often operating above normal levels of utilisation. Some companies reported retaining employees in anticipation of a rebound in orders because of skill shortages.
Investment intentions remain consistent with moderate growth in spending over the coming 12 months, although they had eased a little in the manufacturing sector, with some sectors such as the oil & gas supply chain being more cautious and Sterling’s appreciation dampening intentions for some exporters.
You can get the Bank of England Agents’ summary report from their web-site at http://www.bankofengland.co.uk/publications/Documents/agentssummary/2015/Sep.pdf or on request from MTA.
European Industrial Production, July 2015: The latest data from Eurostat shows that total industrial production in the Euro-zone was +0.6% higher than in June, with growth of +0.3% for the EU28 as a whole. Compared to July 2014, industrial production increased by +1.9% in the Euro-zone and by +1.8% for the EU28 overall.
Although not the leading sector in the latest data, the Capital Goods industries generally outperformed the figures for total industrial production; output of capital goods in the Euro-zone was +1.4% higher than in June and +2.2% up on a year earlier, while for the EU28 as a whole, the trends were +0.7% and +1.8% respectively.
Looking back over 12 months, among the 24 Member States for whom the data is available, total industrial production increased in 18 and fell in only 5. The fastest growth was in Ireland (+17.9%) and Slovakia (+11.9%), while the largest reductions were recorded in Estonia (-5.9%) and Netherlands (-4.4%).
You can download the Eurostat News Release from their web-site at http://ec.europa.eu/eurostat or request it from MTA.
USMTO and US CTMR, July 2015: The US Manufacturing Technology Orders (USMTO) programme tracks orders received in the US market, irrespective of origin; the numbers in this report are based on the totals of actual data reported by companies participating in the USMTO programme. In the first seven months of the year, orders are -8.7% lower than in the same period last year (January to July 2014).
The News Release reports that US manufacturers are cautious at the moment with concerns about the slowdown in China, a drop in key indicators such as the PMI (although this remains positive) and the situation in Europe adding uncertainty - they could have added (but didn’t) that US exports are being hit by the strength of the Dollar.
The regional breakdown is not complete because of confidentiality issues in a couple of regions, but it points to orders falling in 4 regions, with the fall of -51.6% in the South Central region being, by far, the most significant; the other two regions - the North-East and North Central West areas (these are the ones affected by the confidentiality issues) - appear to be expanding.
The US Cutting Tool Market Report (CTMR) tracks sales of cutting tools in the US and the latest figures show that sales in July 2015 were -6% lower than in June 2015 and -5.6% down on July 2014; the year to date total is not published and there is no regional breakdown of this series. This News release also sounds a note of caution with changing currency values and low oil prices being highlighted as the cause of “the flat to declining cutting tool market”.
You can download the News Releases on these two reports from the AMT web-site at www.amtonline.org or request them from MTA (we have a small mailing list for these surveys and can send them to you each month as they are released if you wish).
CECIMO Forecast of Manufacturers Orders, 2nd Quarter 2015: This is a forecast for orders for machine tool manufacturers across 8 European countries (note that it is one forecast for all of the countries as a single block). In the summary, it highlights a number of trends which point in various directions, but concludes that industrial production globally is likely to grow and that an investment backlog has built up, leading to the conclusion that demand for machine tools should pick up in the 2nd half of 2016.
The table and charts which support the forecast, along with the various comments is available on request from MTA - contact Geoff Noon (e-mail: email@example.com).