CBI Industrial Trends Survey, November 2020: The latest results from the CBI Industrial Trends Survey (ITS) suggests a dip in activity in “November” (but note that data collection was from 26 October to 12 November so the trends probably don’t have much indication from November). Both total and export order books deteriorated a little from the October level and they remain well below the long-run average level.
We also see some weakness in the output data although the use of rolling 3-month periods spreads out the results over a longer period than the snapshot of order books. Output in the 3 months to “November” (see above - practically this will be August, September and October) eased marginally and was falling at its slowest rate since September 2019 - note that this illustrates that UK manufacturing output was falling before the Covid-19 outbreak hit demand. On this basis, output fell in 9 of the 17 sub-sectors covered by the ITS, with aerospace the weakest of these groupings.
While this is just about good news, the indications for output over the coming 3 months weakened going back to a level we last saw in August and in sharp contrast to the outlook in the “October” survey.
You can read the CBI Press Release on these results at https://www.cbi.org.uk/media-centre/ (19 November) or request them from MTA (we can also provide a brief summary of the results).
UK Business Enterprise R&D, 2019: Updated figures from the Office for National Statistics (ONS) show growth of +3.3% in spending on research and development (R&D) activity in 2019 to £25.9 billion. This amounts to 1.2% of GDP.
Two industries stand-out as the leaders in R&D expenditure; pharmaceuticals accounted for 18% of the total spending in 2019 with growth of +6.9%, followed by the automotive industry which made 13% of R&D expenditure, albeit in this case, -9.0% lower than in 2018. The aerospace industry is also in the top 5 of R&D spenders and this saw a fall in 2019 of -1.6%. One other area with a significant expenditure on this activity is the machinery industry which saw growth of -9.2% in expenditure compared to 2018.
In 2019, 93% of R&D expenditure was related to civil activities, with the remaining 7% being on defence topics. In the same year, 79% of business R&D was funded by businesses’ own funds, followed by 15% coming from overseas; of the rest, 3% came from government support and 2% from other UK businesses (i.e. not from the company carrying out the R&D).
Almost 50% of business R&D in 2019 was classified as “experimental development”, with 41% being “applied” R&D with the reminder “basic” activity.
There is more detail of all this in the ONS Statistical Bulletin and data tables which can be download from their web-site at https://www.ons.gov.uk/releasecalendar (20 November) or you can request it from MTA.