UK National Accounts & Investment, 3rd Quarter 2020: Just before Christmas, the Office for National Statistics (ONS) published the national accounts for the 3rd quarter of 2020; this saw the quarterly growth rate for GDP revised up slightly to +16.0% (previously +15.5%). Of course, this record high rate of growth is mainly a bounce from the record decrease of -18.8% in the 2nd period of the year.
On this theme, the strongest sector in the 3rd quarter was construction but this had seen the largest fall in Q2, so that is not surprising. Manufacturing, with growth of +19.5% (-20.8% in Q2) also out-performed the economy overall which was heavily influenced by the service sector which is by far the largest part of the economy.
Usually, the National Accounts give us the breakdown of investment by sector and industry group but this analysis has been delayed again. All we have is a revision to the figures for total business investment which show growth of +9.4% compared to the 2nd quarter of 2020, but a reduction of -19.2% compared to year earlier (Q3-19). Within that total, spending on “ICT & Other Machinery” was slightly stronger with trends of +12.3% and -13.3% respectively.
You can download the ONS Statistical Bulletin for the National Accounts from their web-site at https://www.ons.gov.uk/releasecalendar (22 December) or you can request it from MTA.
CBI Industrial Trends Survey, December 2020: Data from the CBI Industrial Trends Survey (ITS), which was collected between 23 November and 11 December, showed an improvement in total order books which stood at their highest level for 10 months, although still short of the long-run average. Export order books also improved a little but here the gap to the long-run average level remains large.
Output volumes over the past 3 months fell at a relatively slow pace and similar to the two previous surveys, suggesting that output activity has levelled-off. Output fell in 7 of the 17 sub-sectors covered by the ITS but the bad news is that by far the weakest industry was motor vehicles and transport equipment (combined as one industry in the ITS). Respondents to the survey expect output to decline at a similarly modest pace in the next 3 months.
The Press Release of the CBI ITS is available from their web-site at https://www.cbi.org.uk/media-centre/ (18 December) or on request from MTA (we can also provide a brief summary of the results).
USMTO and CTMR, October 2020: The US Manufacturing Technology Orders (USMTO) programme tracks orders in the US market, based on the reports from participants. In the first ten months of 2020, orders were running at -20% below that of the same period in 2019 (January to October).
We don’t have the full regional breakdown of the data but the trends for metal cutting machines are a useful guide (this group accounted for over 97% of the total market tracked by the survey). All of the regions saw a fall in orders compared to the first ten months of 2019, ranging from only -4% in the South-East (the only region in single-digits) up to -33% in the South-Central area.
The US Cutting Tool Market Report (CTMR) tracks orders for tooling on a similar basis; for the period of January to October of 2020, cutting tool consumption is -23% lower than the same months of 2019 - this is broadly the same pace as the two previous months. There is no regional breakdown in this report.
You can download the press releases for the two surveys from the AMT web-site at www.amtonline.org, with the CTMR release also published on the USCTI web-site at www.uscti.com; alternatively, you can request either or both releases from MTA and we can make sure you get them when they are published each month.
BEAMA Contract Price Adjustment Service: Do you have long-term contracts, either with customers or suppliers? Have you thought about incorporating something in the contract that allows you to adjust the price according to changes in input costs?
On behalf of members, MTA subscribe to a service provided by our colleagues at BEAMA which gives a monthly track of key indices on labour and materials costs. Of course, you need to get the principle and the relevant formulas included in the contract, but this gives you a way of updating the relevant prices independently.
If you would like more details on this, please contact Geoff Noon (email@example.com) at MTA; we can send you a copy of the latest report and some typical formulae and can have a discussion about whether or not this would be useful for you.
CECIMO Economic & Statistical Toolbox, 3rd Quarter 2020: The latest edition of the CECIMO Toolbox has been released covering the data covering this period. The Toolbox groups information into 5 categories covering historical data for the sector, demand, investment, the business climate and general indicators.
The highlights of this report include:
- European and global manufacturing recover partially in the third quarter of 2020 but the overall yearly trends remain negative.
- CECIMO domestic, foreign and total orders decrease at a slower pace.
- Investment levels fall in Europe and banks become more sensitive to risks.
- Business sentiment boosts in the short-term despite the negative business outlook.
- New GDP forecast (from the European Commission) shows greater divergence between key industrial markets.
You can download the Toolbox below.