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PMI, UK and Euro-zone, October 2017:  The UK manufacturing Purchasing Managers Index (PMI) edged up in October, with both new orders and output seeing continued robust growth rates.  Companies are benefitting from strong domestic market conditions and rising inflows of new export business, but price pressures also remain high, with both input costs and output charges accelerating and well above historical levels.  Although the improvement is broadly based, both new orders and optimism eased among suppliers of consumer goods.

In the Euro-zone, there was a further increase in the manufacturing PMI which is now at its highest level for 80 months - it has been in positive territory every month back to July 2013.  The upturn continues to be led by Germany, Netherlands and Austria, but Italy (80 month high) and Spain (29 months) also saw an improvement and France matched the 77-month record set in September.  Among the components of the index, although output eased a little compared to September, the pace of increase in new orders accelerated and job creation set a new survey record high level of growth.

Elsewhere, the picture is a little more mixed with most of the countries and regions we track seeing a fall compared to September, but Mexico was the only one to go below the crucial 50 level.  The only country with a larger fall in its PMI was Sweden, but with the reading still at 59.3, this can hardly be described as a crisis!  The most significant improvements in the PMI in October were in the Czech Republic (up 1.9 points to 58.5) and the USA (up 1.5 to 54.6).  Although direct international comparisons are not necessarily valid, the strongest manufacturing PMI in October was in Switzerland (62.0).

The IHS Markit PMI reports for major economies around the world are available from their web-site at;  a set of summary charts is available from MTA.

UK GDP, 3rd Quarter 2017:  The preliminary estimate released by Office for National Statistics (ONS) showed the UK economy growing by +0.4% compared to the 2nd quarter, leaving the annualised growth rate at +1.5%.  The quarterly rate was slightly faster than most commentators had been expecting and will have contributed to the Monetary Policy Committee’s decision to raise UK interest rates at its meeting this week.

At the sector level, manufacturing grew by +1.0% over the previous quarter and by +2.7% on a year earlier - we will get the detailed figures by industry in a couple of weeks, but we expect that, at least in part, this will reflect the recovery in the Automotive industry after the model changes which affected car output in the 2nd quarter.

Inevitably, given that it accounts for ¾ of the economy, the growth rates for the service sector matched those for GDP, but we saw a further contraction in the construction sector where output was -0.7% lower than the previous quarter, although this is still +2.8% higher than a year earlier.

You can download the ONS Statistical Bulletin from their web-site at or request it from MTA.

European GDP, 3rd Quarter 2017:  The preliminary flash estimate from Eurostat shows that GDP was +0.6% higher than in the 2nd period of the year for both the Euro-zone and the EU28;  although this was slightly slower than the growth rate in the previous quarter (+0.7% in both cases), the annualised rate of growth accelerated to +2.5% for both areas.

There is no country data in this initial release, but it does show a further shift whereby the pace of growth in continental Europe has largely overtaken that in the UK economy.  You can download the Eurostat News Release from their web-site at or request it from MTA.

CBI Industrial Trends Survey, October 2017:  The latest results from the CBI survey show a softening of growth - but note, still growth - in both output and new orders.  The slowing of the pace of growth in production was against the expectations from earlier surveys, but the survey respondents expect this to pick up again over the next 3 months.  Although it was spread across most of the sub-sectors and industries, the CBI note that the softening was mainly in the Food & Drink sector.

The slower pace of growth in orders was reflected in both home and export activity, although this did not stop the level of export order books being lifted to their highest point since July 1995.  As with output, manufacturers expect both parts of the orders series to accelerate over the next 3 months.

Orders/sales remains the most reported constraint on activity levels (we see the same in our own Business Survey), but the percentage of firms citing this factor dropped to its lowest level since October 1974.  In parallel, the proportion of firms working below capacity is at its lowest since January 1998 and concerns over skills shortages as a constraint on activity were at their highest for 4 years.

Despite this positivity, there is slightly less good news on investment, with the intentions figures showing a sharp reduction;  although most of this was with regard to new buildings, the plant & machinery trend also fell back.  The main driver of investment was to “improve efficiency”, with a sharp fall in the trend for “replacement” and little change in the need to “expand capacity”.  While “uncertain demand” and “inadequate return” continue to be the main constraints on investment, at a lower level there was a small but significant increase in reports of “labour shortage” which matched the peak that was previously seen in October 2013.

At a sector level, the investment intentions data remains volatile, but despite a sharp fall in the October survey, the 4-quarter moving average for Transport Equipment remains on a generally rising trend;  the series for Mechanical Engineering (Machinery) and Metal Products are still broadly flat at relatively poor (although not recessionary) levels.

You can download the CBI’s News Release from their web-site at (dated 23rd October) or request it and a summary of the survey results from MTA.

European Commission Economic Sentiment Indicator, October 2017:  The European Commission (EC) draws on business surveys from across Europe, including the CBI Trends Surveys for the UK, to arrive at its Economic Sentiment Indicator (ESI).  There was another increase in October for both the Euro-zone and the EU28, reaching their highest levels since January 2001 and June 2007 respectively.

Industry confidence in the Euro-zone is still on the strong upward trend that now goes back just over a year, driven by improved assessments of the current level of order books and the stocks of finished products, although expectations for output over the coming 3 months weakened slightly - this may be due to the end of year holidays creeping into the outlook and a base effect as managers assessments of recent production levels improved markedly.  There was a similar improvement for the EU28 as a whole, with the UK (the largest non-Euro economy) seeing a pick-up in sentiment.

As this is a quarterly report, we also get an update on capacity utilisation (CU) rates;  the Euro-zone saw another increase with the CU rate reaching 83.8%, which is well above its long-run average;  the EU28 as a whole saw an improvement to 83.6%.  Both of these represent the highest level of capacity utilisation since the 2nd quarter of 2008.  Capacity utilisation also increased in the UK, reaching its highest level since the 2nd quarter of 1995 at 84.6%;  the 4-quarter moving average improved to 82.8%, its highest since the 2nd quarter of 2015.

You can download the European Commission’s report from their web-site at or you can request it from MTA.

USMTO and US CTMR, August 2017:  The US Manufacturing Technology Orders (USMTO) programme tracks orders received in the US market - the data in this report are based on the actual totals reported by companies participating in the USMTO programme.  For the first 8 months of 2017, orders grew by +11.2% compared to the same period (January to August) in 2016.

Among the 6 regions used in the USMTO report, orders increased in 4, with the fastest growth being in the South-Central area (+75%);  the two regions that saw a slowing of the market were the North-East (-4%) and the South-East (-2%).

The US Cutting Tool Market Report (CTMR) tracks sales of cutting tools in the US market and, like the USMTO programme, reports on the basis of the returns that are received.  This market is also growing at a gently accelerating pace with the cumulative trend for the first 8 months of the year at +7.7% (it was +7.1% for the January to July period).  There is no regional breakdown for cutting tools.

You can download the USMTO News Release from the AMT web-site at and the Cutting Tool News Release from, or you can request both from MTA.

CECIMO Economic & Statistical Toolbox, September-October 2017:  Following a break over the summer, partly due to a change in staff at CECIMO, the latest edition of their Toolbox report has been published.

It contains a round-up of European level data on topics such as GDP, industrial production, exchange rates, as well as indicators of business confidence (OECD), capacity utilisation and the European Central Bank’s Lending Survey.  At a machine tool level, there are summaries of the latest data on orders, production, trade and consumption as well as tracking MT-IX - this is CECIMO’s own index of the share price of publicly quoted machine tool companies around the world, in which the European index reached a new high in September (the series goes back to 2004).

The Toolbox can be downloaded from the CECIMO web-site at (go to “The Industry” section) or requested from MTA.

BEAMA Contract Price Adjustment Service:  If you have long-term contracts, either with customers or suppliers, have you thought about incorporating something in the contract that allows you to adjust the price according to changes in input costs?

On behalf of members, MTA subscribe to a service provided by our colleagues at BEAMA which gives a monthly track of key indices on labour and materials costs.  Of course, you need to get the principle and the relevant formulas included in the contract, but this gives you a way of updating the relevant prices independently.

If you would like more details on this, please contact Geoff Noon ( at MTA;  we can send you a copy of the latest report and some typical formulae and can have a discussion about whether or not this would be useful for you.