CBI Industrial Trends Survey, September 2020: The latest results form the CBI Trends Survey show that manufacturing activity remains weak in “September” [note – the data collection ran from 26th August to 14th September so the results mostly refer to August, with the latest 3 months being the June to August period]. Output volumes over the past three months continued to fall and, although this was at the slowest pace since before the Covid-19 outbreak, it remains significant in historic terms.
There was a fall in output in 10 of the 17 sub-sectors in the CBI survey with, unfortunately, the motor vehicle and transport equipment leading the way with the largest downturn. There is some good (or rather less bad) news in that respondents to the survey expect the pace of decline in output to fall further in the coming 3 months although unlike the other data, this is only an expectation.
The balance for total orders books appears to have levelled-off at a weak position; the question asks if order books (total and export) are “above normal”, “normal” or “below normal” and the balance has now been in the upper -40’s for the past three months (-48 in September). While this is an improvement on the total order books balances of -56 in April, -62 in May and -58 in June, it is still well below the long-run average. A similar situation exists for export order books where the latest balance of -56 is slightly better than the -60 in the previous month but, again, well below the long-run average.
You can get the Press Release of the CBI ITS from their web-site at www.cbi.org.uk/media-centre (22 September) or request it from MTA - we can also provide a summary of the results.
UK Trade by Industry, 2nd Quarter 2020: The Office for National Statistics (ONS) recently published its breakdown of trade data (exports and imports) by industry which highlights the impact of the Covid-19 outbreak on the engineering sector. While total exports of all manufactured products fell by -7.7% compared to the 1st quarter and were -10.1% lower than a year ago (Q2-19), the engineering industries (which accounts for 39.8% of total manufacturing exports) saw declines of -26.4% and -31.2% respectively.
We see a similar trend for imports although the gap between manufacturing and the engineering sub-set is not as large. In the 2nd quarter, total manufacturing imports fell by -20.0% on the previous quarter and by -27.4% compared to a year earlier, while the equivalent figures for the engineering industries were -24.0% and -33.6% respectively. For imports, the engineering industries accounted for 43.5% of total manufacturing trade in the 2nd quarter of 2020.
At the individual industry level, it won’t be surprising to regular readers of our economic reports that the automotive industry was hardest hit. This saw exports fall by -60.3% compared to Q1-20 and -67.5% on a year earlier; for imports, the trends showed declines of -50.0% and -59.6% respectively. In both series, the aerospace industry saw the next largest reductions in the 2nd quarter of 2020 which is expected to be the worst quarter of the current crisis; exports were down by -25% and -19% on the two comparisons, but there was a larger impact in the imports series which saw reductions of -46% and -43% respectively.
If you are interested in more detail, including a breakdown of the top level industry data quoted in this article, please contact Geoff Noon at MTA (e-mail: email@example.com) for the data file and engineering industry analysis.