CBI Industrial Trends Survey, November 2022:  The latest results from the CBI Industrial Trends Survey (ITS) show that manufacturing output grew in the three months to “November”, its first increase since the equivalent period to “July”.  However, the less good news is that it is expected to contract over the coming 3 months, although as this is effectively November, December and January, there may be a seasonal impact in this.

This increase in output comes following three surveys with a negative balance and although the data is not collected in this way, it implies that business picked up from around September, probably after the holiday season.  Output was positive in 9 of the 17 sub-sectors used in the CBI survey, led by the food & drink, automotive & transport equipment (not separated in the CBI analysis) and chemicals sub-sectors.

Total order books in “November” were reported to be slightly below normal and at around the rate that we have seen each month since “August”.  Export orders were also below normal by about the same amount as for total orders, although here this represents an improvement compared to the previous survey.

Stocks of finished goods were broadly adequate in this survey and at a similar level to both “September” and “October”.

Note that we use inverted commas for the months because these are the months of publication but the data collection period really means that the figures will refer to the previous month – in the case of the current survey, this is October rather than “November” as data collection ended on 14th November.

You can get the Press Release of the CBI ITS from their web-site at www.cbi.org.uk/media-centre (24 November) or request it from MTA (we can also provide a summary of the results).


European Commission Economic Sentiment Indicator & Investment Survey, November 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).

November saw the first increase in the ESI since February with a modest improvement for both the EU and the Euro-zone.  However, this was driven by a strong rebound in consumer confidence and while construction, retail trade and services were effectively flat, there was another fall in industrial confidence.  Financial services saw a very strong rebound from a very weak October.

The fall in industry confidence – the 9th in a row – came because of a further fall in total order books and an increase in stocks of finished products although this was mitigated slightly an improvement in expectations for output over the coming 3 months.  Although not included in the calculation of the confidence index, the survey respondents assessment of output over the past 3 months and export orders books both continued on their recent downward path.

There was a mix of trends among the 6 largest EU economies with a strong improvement in Italy and more modest growth (in line with the EU average) for Netherlands and Germany.  Sentiment in Poland was broadly flat but there was a fall in the Esi for both France and Spain.

The ESI is calculated against a base set by the long-run average reading so this is adjusted marginally each month when the new reading is recorded.  Most of the EU countries currently have an ESI reading below 100 (the long-run average level) with Bulgaria, Croatia, Cyprus, Greece and Romania the only exceptions where it is over 100;  the EU candidate countries are also included in this survey and here the list of those with an ESI above 100 is joined by Albania and Montenegro.

This report also includes the results of the EC’s biannual investment survey;  this has now ticked over and shows an estimate for 2022 (the third reading for this year) and the first set of expectations about 2023.  The overall outlook for investment spending in 2022 remains strong but for both the EU and the Euto-zone, it is lower than in either of the two previous surveys (this time last year and April 2022).  The same trend is also true for most of the major economies although France reported a higher balance than in either of the other estimates.

For 2023, the outlook is remarkably strong given the economic fundamentals at the moment and while the reading for both the EU and the Euro-zone is lower than the estimate for 2022, balances of +13 and +15 respectively remain pretty healthy.  Again, most countries share the pattern we see for the EU as a whole but there are more exceptions this time;  the outlook for 2023 is stronger than in 2022 for Spain, Belgium and, to a lesser extent, Italy, while Austria has the same reading for both years, although this is only just positive in both cases.

A handful of EU countries have a significantly negative outlook for 2023, most notably Poland (-21) for both its magnitude and size – Estonia and Denmark also have double-digit negative balances for 2023, with the former following a similarly large negative for 2022 as well.

You can download the EC report and statistical annex from their web-site at https://ec.europa.eu/info/business-economy-euro/indicators-statistics/economic-databases/business-and-consumer-surveys/download-business-and-consumer-survey-data/press-releases_en and open the folder for 2022 or you can request it from MTA.


UK Business Enterprise Research & Development, 2021:  Data just published by the Office for National Statistics (ONS) shows that spending on R&D by UK businesses increased to £46.9 billion in 2021, an increase of +6.7% compared to 2020.  Despite the pandemic, R&D spending has increased each year since 2018 when the current methodology was introduced.

Of this total, over 41% (£19.4 billion) is carried out by the manufacturing sector and while the service sector has a higher share (54% – the rest in in industries such as agriculture, extraction and construction) a good chunk of the service sector R&D is in technical testing & analysis which sounds like it is closely related to manufacturing, at least in part.

Within manufacturing, the largest industry for R&D is chemicals & pharmaceuticals – with the latter probably accounting for most of this – which accounts for 42% of the manufacturing total.  Other significant contributions come from “transport” (probably mainly automotive) at 16% of total manufacturing R&D, electrical machinery (11%), mechanical engineering (9%) and aerospace (8%).

Regionally, by far the largest R&D spending is in London, the South-East and Eastern parts of England – as a group, these areas accounted for 52% of all UK R&D spending in 2021.  With the North and Midlands & South-West groups evenly split, England as a whole accounted for 89% of the total for the UK.

Employment in R&D activities within UK companies is concentrated in the service sector and with manufacturing accounting for 41% of spending, its share of employment was only 22%.  Finally, looking at the size of companies (based on the number of employees), there is a fairly even split between the share of R&D expenditure in companies below (52%) and above (48%) the 250 employee threshold.

You can access the ONS bulletin and data files from their web-site at https://www.ons.gov.uk/releasecalendar (22 November) or request them from MTA.

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