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Economic Data this week

CBI Industrial Trends Survey, June 2016:  In the latest results from the CBI survey, respondents reported a further improvement in their total order books in the latest 3 months, although this improvement came from the home market with export orders only flat.  Although half of the sectors reported an increase in total orders, most of the growth came from just two sectors - Food & Drink and Motor Vehicles & Transport
Output continued to expand at a solid pace and firms were upbeat about the short-term outlook for production.  There was a wide variation in the trends between sectors with a sharp slowdown in Chemicals contrasting with an improvement for both Mechanical Engineering and Motor Vehicles.
You can download the CBI Press Release from the news section of their web-site at www.cbi.org.uk (it was published on 21st June) or request it and/or a summary of the results from MTA.

Bank of England Agents’ Summary of Business Conditions, 2nd Quarter 2016:  This is one of the more detailed quarterly overviews from the Bank of England’s Agents’;  it reported a small improvement in the pace of growth in manufacturing output for the home market - led by the Automotive and Aerospace industries, but with capital goods generally, especially those related to the Oil & Gas industry, falling - coupled with an easing of the pace of contraction in export volumes - the latter is partly a reflection of the depreciation of Sterling.
The agents noted some reports of delays in decision taking on corporate spending until after the EU Referendum.  Manufacturing investment intentions were broadly flat with a mix of trends again evident - the Automotive industry was among those noted to be investing to expand capacity;  some manufacturing firms had noted that the fall in Sterling had made capital goods more expensive which had reduced the attractiveness of investment.  Capacity utilisation remains slightly below “normal” in the manufacturing sector.
This month’s report also included a special survey on employment intentions and productivity.  The first part of the survey showed that employment had increased over the past 12 months and by less than activity, implying an increase in productivity;  for the coming 12 months, expectations for both employment and activity are slower than in the past 12 months , but more so for employment - this is consistent with expectations of slightly stronger growth in productivity in the year ahead.
Businesses planned a range of activities to boost productivity in the next 12 months, including improving both capital and labour efficiency.  Access to skills was a commonly reported constraint on businesses’ ability to raise productivity.
You can download the Bank’s Agents summary of business conditions from their web-site at http://www.bankofengland.co.uk/publications/Documents/agentssummary/2016... or request it from MTA.

CECIMO General Assembly Report:  The press release from the recent CECIMO General Assembly points to growth of +5% in European machine tool production in 2015 for a total value of €24.3 billion.  With economic activity in Europe stable, an accommodating monetary policy, recovering business confidence and a calmer outlook for emerging markets, CECIMO estimates that production in 2016 will be similar to that in 2015.
European machine tool consumption was worth €14.9 billion in 2014, an increase of +12%;  growth in 2016 is forecast to be +1%, with Dr Frank Brinken, Chairman of the CECIMO Economic Committee and Vice-Chairman of Starrag Holding AG, noting that ““We are glad to see that machine tool consumption in Europe shows good pace - upgrading and modernising its production base is an essential condition to keep the competitiveness of European manufacturing sector at high levels”.  Almost two-thirds of CECIMO machine tool imports come from other European countries, although this calculation is affected slightly by warehousing operations.
The other main topic of the press release was the “digitisation of manufacturing”.  Luigi Galdabini, President of CECIMO said: “For Europe to realize its re-industrialization, policy- makers must develop a holistic approach addressing the entire manufacturing value chain. To ensure that that digitisation supports Europe’s global manufacturing leadership, we need to develop forward-looking policies, instead of premature rules, underpinning the innovative character of the European machine tool builders.”

You can download the CECIMO press release from their web-site at www.cecimo.eu or request it from MTA.