UK National Accounts (GDP and Investment), 4th Quarter 2021:  With the publication of the quarterly National Accounts by the Office for National Statistics (ONS), the estimate for economic growth in the UK economy has been revised up to +1.3% compared to the previous quarter.  This uprating is largely due to a range of revisions across the service sector.  In output terms, the largest contributions to GDP growth in Q4-21 came from the human health & social work activities with a rise in GP visits at the start of the quarter and large increases in coronavirus test & trace activity and the extension of the vaccination programme.

However, thanks to some other revisions to earlier data, the estimate of growth for 2021 has been revised down slightly to +7.4% (from +7.5% in the first estimate) and there has also been a small change to the 2020 figure which is now put at -9.3% (previously -9.4%).

The level of GDP in the 4th quarter of 2021 was just 0.1% points short of the pre-pandemic level (taken to be Q4-2019 for the quarterly data).  In real terms, among the G7 countries, this puts us behind the USA, France and Canada who are all ahead (only just in the case of Canada) of their pre-pandemic levels but ahead of Italy, Japan and Germany – the latter is the furthest from the pre-pandemic position.

Manufacturing output is now estimated to have been +0.4% higher than in the 3rd quarter, largely due to an increase in production of basic pharmaceuticals but the level is -1.5% below the pre-pandemic level.  For 2021 as a whole, manufacturing output is estimated to have grown by +7.2%, following a fall of -8.9% in 2020.

The other important element of the National Accounts is revised data for investment in the UK economy.  Total business investment is now estimated to have risen by +1.0% compared to both the previous quarter (Q3-21) and a year earlier (Q4-20);  there was an increase of +0.8% for the year as a whole, following a decline of -11.5% in 2020.

Total manufacturing investment fell by -0.7% quarter-on-quarter but was +6.4% higher than a year earlier and grew by +8.3% in 2021;  however, this followed a fall of -11.2% in 2020 so the level is still below the most recent peak which was recorded in 2018.  Manufacturing investment accounted for 17% of total business investment in 2021.

Within manufacturing, the Engineering & Vehicles industries accounted for 46% of investment in 2021.  For this group, capital spending fell by -6.0% compared to the 3rd period of 2021 but was +1.6% higher than in Q4-21.  Across 2021 as a whole, investment by this group of industries increased by +5.6% following a reduction of -6.3% in 2020.

There are more details in the ONS Statistical Bulletins which you can download from their web-site at (31 March) or request from MTA.


European Commission Economic Sentiment Indicator, March 2022:  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 (financial services is not part of the calculation) to make up its Economic Sentiment Indicator (ESI).  The key point in this survey is that data collection took place after Russia’s invasion of Ukraine.

As a result, there was a sharp fall in the headline ESI in both the Euro-zone and the EU, mainly because of a very sharp fall in consumer confidence.  Confidence also fell in the industry, retail trade and financial services sectors – the latter had the sharpest fall of all but is not included in calculating the ESI – while construction sector confidence was broadly the same as in the previous month and there was a small improvement in the service sector (the latter was mainly a reflection of demand over the past 3 months rather than any forward looking indicator).

The fall in industry confidence in this report was driven mainly by a sharp reduction in respondents expectations for production in the coming 3 months (note that this is the main forward looking element of this calculation);  in parallel, the current level of order books only eased slightly and there was an improvement in the assessment of the adequacy of stocks of finished products.  Two other topics – export order books and production over the previous 3 months – are covered although not used in calculating the confidence indicator;  both of these measures deteriorated compared to the previous survey.

Most of the countries saw a sharp fall in the ESI;  among the largest economies, France, Spain and Germany saw the largest reductions while Poland and Italy had a more moderate decline by comparison and there was a slight improvement in the Netherlands.  As a result of the fall in confidence, there are now more countries whose ESI reading is below the long-run average (the base for the index);  this list now includes Belgium, Bulgaria, Czechia, Estonia, Latvia, Poland and Slovakia, while among the candidate countries, Albania, Montenegro, Serbia and Turkey all had below average ESI readings.

You can download the EC report and statistical annex from their web-site at or you can request it from MTA.


US Cutting Tool Market Report, January 2022:  Further to our note last week about the machine tool market in the US, the Cutting Tool Market Report (CTMR) has now been published.  Although down slightly on the December 2021 figure, the companies that respond to the survey reported that consumption was +10.5% higher than in January 2021.

The rolling 12-month trend for the US cutting tool market continues it slow but steady improvement from the low point that was reached in March 2021 (a year after the impact of the Coronavirus outbreak).  Comments in the press release suggest that higher prices are seen as the main barrier to stronger growth with the impact of the Russia-Ukraine war and the policy reaction to higher energy prices as the main challenges.

You can download the press release for the CTMR from the AMT web-site at or you can request it from MTA and we can make sure you get them when they are published each month.

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