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ECONOMIC DATA THIS WEEK

European Industrial Production, January 2017:  Data from Eurostat shows that total industrial production (manufacturing plus utilities and extraction activity) in the Euro-zone was +0.9% higher than in December 2016, although it is worth noting that this fell by -1.2% in the previous month, so this is no more than a correction of the previous figure;  compared to January 2016, total industrial production increased by +0.6%.  For the EU28 as a whole, the trends were +0.5% and +1.3% respectively.

Within the totals, Euro-zone output of Capital Goods grew by +2.8% compared to December 2016, but was -0.8% lower than a year earlier in January 2016;  for the EU28 as a whole, these trends were +2.4% and +0.8% respectively.

Looking at the 12-month trend only, among the 22 Member States for whom the data is available, total industrial production increased in 17 and fell in 5.  The fastest growth was in Lithuania (+8.4%) and Greece (+7.4%), while the biggest falls were in Ireland (-8.6%) and Bulgaria (-1.2%).

You can download the Eurostat News Release from their web-site at www. http://ec.europa.eu/eurostat or request it from MTA.

CBI Industrial Trends Survey, March 2017:  The latest results from the CBI survey which, despite its title, covers the periods to February, shows manufacturers reporting that demand had remained strong in the latest 3 months, with export orders, in particular, showing a marked improvement.

Export order books were at their highest level since December 2013 and more generally are at among the strongest positions since 1995.  Although the improvement was broadly based with a majority of the sub-sectors seeing an improvement on the previous month, it was led by Mechanical Engineering and Pharmaceuticals which accounted for half of the growth between them.

Output growth also improved to reach its quickest pace since July 2014, under-pinned by the Mechanical Engineering (again) and Food & Drink sub-sectors.  This ties in with the recent ONS data on output which points to an improvement (at last) in the Mechanical Engineering sector’s activity.  Respondents also expect a further acceleration in output growth, with the expectations measure at its highest rate in more than 20 years.

You can read the CBI’s Press Release on these results on their web-site at www.cbi.org.uk/news (dated 21st March) or request it from MTA along with a brief summary of the data.

Bank of England’s Agents’ Summary of Business Conditions, 1st Quarter 2017:  The latest update from the Bank’s Agents’ shows that “moderate” rates of activity growth have continued, but for manufacturing remained “modest”.  Some suppliers had benefitted from increased domestic sourcing (driven by improved price competitiveness against imports), while the weakness of Sterling and a stronger world economy had led to a marked rise in export volume growth.

Demand growth was strongest in the Automotive, Aerospace, Industrial Chemicals, Pharmaceuticals and Construction Products industries, mainly reflecting activity in export supply chains.  Suppliers into the Oil & Gas industry continued to see weak demand.

Investment intentions edged higher, but are still only consistent with a modest increase in spending over the next year.  The agents noted that firms were going ahead with plans designed to mitigate increased energy, labour and materials costs and that these included spending on technologies such as renewables, robotics or enhanced business systems.  While uncertainty had eased in the short-term, a lack of visibility of the UK’s future trading arrangements continues to weigh on longer-term plans for some contacts.

Rising demand had led to a small increase in capacity utilisation;  for manufacturing, the constraints were greatest in the Automotive and Construction Products industries - with labour more often the problem than physical capital - but plenty of spare capacity in the Oil & Gas sector.

You can download the Bank of England’s Agents’ Summary from their web-site at http://www.bankofengland.co.uk/publications/Pages/agentssummary/default.aspx or request it from MTA.

USMTO and CTMR Reports, January 2017:  The US Manufacturing Technology Orders (USMTO) programme tracks orders placed in the US market, with the actual data received being reported.  Orders in January 2017 were -40.7% lower than in an exceptionally strong December 2016, but were also -11.4% lower than a year earlier (January 2016).

However, this slow start to 2017 was largely expected and the AMT’s News Release points to the recent announcement of several large capital expansion projects (including Pratt & Whitney and Toyota) and the sixth consecutive increase in the PMI which is usually a leading indicator for investment.

The regional breakdown shows declines in all but 1 of the 6 areas, with the largest reduction being in the South-East (-30% compared to January 2016);  the exception was the South-Central region where orders grew by +53%.

The US Cutting Tool Market Report (CTMR) tracks sales of cutting tools in the US market.  The news here is more positive, with sales up by +8.7% compared to both the previous month and to a year earlier.  There is no regional breakdown of this data.

You can download the news releases for the USMTO and US CTMR from the web-sites at www.amtonline.org and www.uscti.org respectively or request them from MTA.