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ECONOMIC DATA THIS WEEK

CBI Industrial Trends Survey, May 2018:  The latest results from the CBI survey suggest that manufacturing is, to use their headline, “losing steam”;  however, this only points to a levelling off of growth and the sector is still at a high level by historical standards.

The pace of growth in output was at its weakest for two years and the volume of total orders books also fell, although export orders did hold up quite well.  However, this is through to be temporary with respondents to the survey expecting output to accelerate over the next three months.

Looking in some more detail at the output figures, it grew in just 8 of the 17 sub-sectors and industries in the CBI analysis, but it is relevant to MTA members to note that the strongest industries were Mechanical Engineering (Machinery), Aerospace and Metal Manufacture.  The drag on growth came from industries such as Chemicals and Food & Drink.  The output expectations are at their strongest since September 2017.

The CBI Press Release on the survey results is on their web-site at www.cbi.org.uk/news (published on 22 May) or you can request a brief summary of the results from MTA.

UK Trade in Goods, 1st Quarter 2018:  The Office for National Statistics (ONS) reported that the UK’s trade deficit for goods fell at the start of 2018 by £1.1 billion to £34.6 billion, thanks mainly to a fall in imports from non-EU countries.

The main contribution to this came from the Machinery & Transport Equipment category where imports from non-EU countries were £1.3 billion lower than in the final period of 2017.  The main offset to this was an increase in imports of fuels from both within and outside of the EU.  Exports of goods from the UK were almost the same as in the 4th quarter of 2017.

Looking in a little more detail at the regional pattern, the trade deficit for goods with the EU narrowed by £2.9 billion in the 1st quarter of 2018.  This bucks the recent trend which has seen this deficit widening, although it is in line with the long-term trend.  On the same basis, the trade deficit in goods with the non-EU countries widened at the start of 2018.

During 2017, the UK’s top 3 export markets for goods were the USA (14.2% of total goods exports), Germany (10.9%) and France (7.5%), while the largest sources of imports were Germany (14.5%), China (9.0%) and Netherlands (8.6%), although the latter is mainly the impact of trading through Rotterdam.

By commodity, the top 3 for exports were Mechanical Machinery (14.2%), Cars (9.6%) and Electrical Machinery (8.1%).  The same commodities top the list for imports, although the order changes to Electrical Machinery (12.9%), Mechanical Machinery (9.7%) and Cars (7.2%).

You can download the ONS Statistical bulleting from their web-site at www.ons.gov.uk or request it from MTA.