CBI Industrial Trends Survey, February 2020: The results from the CBI Industrial Trends Survey (ITS) that were published this week showed some early signs of a turnaround in manufacturing activity although there is still some way to go before a recovery is confirmed.
While output over the past 3 months fell again - this is now five months when the rolling 3-month trend has been negative - it did so at a slower pace than in the previous survey. The negative trend was repeated in 12 of the 17 sub-sectors covered by the ITS with the overall decline driven mainly by the food & drink and mechanical engineering industries. Of the 5 sub-sectors with a positive trend, the electronic engineering industry was the most prominent. There is a positive balance on the question about output over the coming three months with a small acceleration on the January trend.
There was also a similar improvement in both total and export order books in that they were less negative than they have been in any survey since August 2019. Both of these series have been falling since last April. Total order books are still below their long-run average, although export order books have now recovered to the average level for this series.
There is nothing in this survey that would give a pointer to the impact of the Coronavirus; the question about stocks refers to finished products rather than inputs to production. Respondents indicated that these fell back a little and now stand just above on the long-term average level at +15.
You can get the Press Release of the CBI ITS from their web-site at www.cbi.org.uk/media-centre (20 February) or request it from MTA - we can also provide a summary of the results and some charts around the investment intentions data.
European Commission Economic Sentiment Indicator, February 2020: The European Commission (EC) draws from a range of surveys to construct confidence indicators for six sectors of the economy and then uses five of these to make up its Economic Sentiment Indicator (ESI). However, from this edition, as a consequence of the UK leaving the European Union (EU), the analysis has been re-worked for the current 27 members of the EU. While the overall headline figure is still published for both the Euro-Zone and the EU27, because these have almost converged, the detailed analysis now only refers to the Euro-zone.
The headline ESI improved again in both the Euro-zone and the EU27. This came about because of an improvement in confidence for consumers and, to a lesser extent, industry, while services, retail trade and construction were all broadly stable. Among the largest Euro-zone economies, there was a strong improvement in the overall ESI for Netherlands, France and Spain, a more modest improvement in Germany and Italy was unchanged.
Industry confidence in the Euro-zone improved for the 2nd month in a row although it remains by far the weakest of the five sectors covered by the EC. This was driven by survey respondents reporting that current levels of orders books improved by the highest margin for 2½ years, although the expectations for output and stocks of finished products were only flat. Although not included in the calculation of confidence, they were also more upbeat about output over the past 3 months, while export order books were fairly stable.
You can download the EC report from their web-site at https://ec.europa.eu/info/business-economy-euro/indicators-statistics/economic-databases/business-and-consumer-surveys/download-business-and-consumer-survey-data/press-releases_en or you can request it from MTA.
USMTO, December 2019: The USMTO - US Manufacturing Technology Orders - programme tracks orders in the US market, based on the reports from participants. Although there was a strong end to 2019 with month-on-month order growth of +24% in December, this was still lower than the equivalent month in 2019 - it was, however, the 2nd best month of 2019, behind only March. For the year as a whole, the survey recorded orders for manufacturing technology of just over €4.5 billion, a reduction of -17.1% compared to what had been an excellent year in 2018.
Because of some data confidentiality issues at the regional level in 2018, we don’t have all of the regional trends; however, these are all published for metal cutting machines which account for 97% of the market covered by the USMTO in 2019. Analysis of this shows five of the six regions with double-digit negative reductions for the year - the only exception was the West Region which was “only” down by -9.5% compared to 2018; the steepest declines were in the North-Central-West (-25.1%) and the South-Central (-25.2%).
At the time of writing this report, we don’t yet have the equivalent data for the cutting tool market - we will update this as soon as it is available.
You can download the press release for the USMTO from the AMT web-site at www.amtonline.org; alternatively, you can request it from MTA and we can make sure you get both the USMTO and the cutting tool equivalent when they are published each month.
CELIMO State of Trade Report, February 2020: CELIMO is the European grouping for associations that represents importers and distributors in the manufacturing technology area. The latest edition of its State of Trade report is attached below for MTA members to access. This gives an overview of the European market with some general data (GDP, inflation, unemployment and manufacturing PMI) on all countries with an indication of the market trends for both machine tools and cutting tools for the members.
In most countries the rate of GDP growth slowed in 2019 and with a further deceleration expected for 2020. Inflation is generally low - Turkey is the main exception to this - but the unemployment situation is more mixed; there is a batch of low unemployment countries, with Spain and Turkey having relatively high rates and a handful of others in between. The PMI data shows most countries below the crucial 50 level over the 4 months up to January.
The machine tool market trends were mostly negative in 2019 after growth in 2018, while the data for cutting tools shows a mixture of positive and negative trends in 2019.