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Economic News

CBI Industrial Trends Survey, March 2021:  The latest report from the CBI Industrial Trends Survey (ITS) shows an improved outlook for the manufacturing sector.  Although output volumes were flat in the three months to March (see below), this is the strongest outturn since May 2019 (long before Covid-19 had even been heard of).  Output increased in 8 of the 17 sub-sectors covered by the CBI;  they note that growth led by the electronic engineering and plastic products groups was off-set by declines in paper, printing & media and aerospace.

In the coming 3 months, the respondents expect a significant pick-up in manufacturing output with the score of +30 the highest since August 2017.

Total order books also improved significantly from last month and the balance is at its highest level since April 2019 and well above the long-run average for this series.  Export order books also improved but only to be in-line with their long-run average.

The survey also picks up low levels of stocks which ties up with anecdotal evidence of problems caused by both the Coronavirus outbreak and Brexit.

Note that the data collection period for this survey was from 24th February to 12th March;  therefore, while it is badged as being for March (the month of publication), the trends identified are more likely to be the three months to February (December 2020 to February 2021).

You can get the Press Release of the CBI ITS from their web-site at (23 March) or request it from MTA.

Purchasing Managers’ Index - March 2021 Flash data:  Ahead of publication of the final data for a wide range of countries next week, we have flash reports for a few countries, including the UK.  This puts the UK manufacturing PMI at 57.9 which would be its highest level since November 2017.  New orders and output both increased at their fastest pace this year, despite only a modest improvement in export business.  However, we also saw suppliers’ delivery times extending in the face of shipping shortages and customs delays.

The Euro-zone also saw a sharp increase in the manufacturing PMI which, at 62.4, is at the highest level ever recorded (the time series goes back to June 1997).  This upturn was led by Germany which also had its fastest ever growth in output, with the rest of the region running at the fastest pace since January 2018.

The only other countries with Flash PMI data are Japan and the USA and while they were both in positive territory, the experiences are rather different.  Like Europe, the manufacturing sector PMI in the USA is running at high levels with the flash estimate coming out at 59.0;  although this is only a two-month high as it did not quite get back to the January level, you have to go back to 2014 to see readings at this level.  In contrast, Japan has a relatively anemic PMI reading of 52.0 although this is the 2nd consecutive reading above 50 and the strongest index since December 2018.  It is encouraging to note that this improvement is driven by an acceleration in new orders which should in turn drive output up in the coming months and reverse the falls in employment that continued in the latest survey.

The IHS Markit PMI reports for major economies around the world are available from their web-site at;  we will update our report for next week’s Friday Brief when we have the final figures from around the world.

USMTO and CTMR, January 2021:  The US Manufacturing Technology Orders (USMTO) programme tracks orders in the US market, based on the reports from participants.  The total for the first month of this year was +11.6% higher than a year earlier, but down by -28.9% compared on the very high figure that was registered in December 2020 (the previous month).

We don’t have the complete regional breakdown because of confidentiality issues but we can use the trend for metal cutting machines - these account for nearly 95% of the total value for the month, so it is a good guide to the overall trend.  Only the North-Central-West region registered orders lower than in January 2020 (-12%), with the other five regions seeing growth which was led by an increase of +29% in the South-East.

Looking at the rolling 12-month trend in total orders, this seems to have turned the corner, there have now been 3 consecutive months of growth from the low point in October 2020.  The AMT press release notes that there was a burst in orders for metal forming technology with the automotive sector particularly active as it catches up with new model activity that was postponed from 2020 on top of that scheduled for 2021 anyway.

The US Cutting Tool Market Report (CTMR) tracks orders for tooling on a similar basis and saw a month-on-month fall of -3.2% at the start of 2021 to a level that was -21.8% lower than a year ago.  This longer-term trend reflects the fact that demand was still high before the impact of the Coronavirus pandemic and the 12-month rolling average for cutting tools is still falling;  this is likely to continue until the middle of this year when the impact of the first quarter of 2020 drops out of the calculation.  There is no regional breakdown in the cutting tool report.

You can download the press releases for the two surveys from the AMT web-site at, with the CTMR release also published on the USCTI web-site at;  alternatively, you can request either or both releases from MTA and we can make sure you get them when they are published each month.

UK Trade by Industry, 4th Quarter and 2020:  Analysis from the Office for National Statistics (ONS) of the recently released trade data shows some interesting changes.  Although the recent data is for the 4th quarter, in most of this note we will refer to the annual totals and trends for the whole of 2020.

Exports of goods by the 4 key end-user industries – Metal Products, Machinery (mechanical engineering), Automotive and Aerospace – fell by -23% compared to the 2019 total and when you add in the other elements of engineering (electrical, electronics and instruments) the decline was -20%.  With both of these figures showing a sharper fall than for all manufactured goods (-15%) so the share of this total accounted for by the Engineering sector fell to 47.5% having been 50.5% in 2019 and 51.9% in 2018.

The UK had a trade deficit in manufactured goods of £109.7 billion in 2020;  of this, £42.5 billion (39%) was down to the engineering sub-sector and only £8.4 billion in the 4 key industries for the manufacturing technology sector - the big difference is the deficit of £26.0 billion in computer, electronic & optical products where imports are worth more than twice that of UK exports.  Two of the key industries had a trade surplus in 2020 - just over £10 billion for aerospace and £0.25 billion for machinery.  In the latter case this represents a welcome turnaround from trade deficits in both 2018 and 2019.

By industry, automotive exports fell by -29% compared to 2019, while the aerospace industry saw a reduction of -30%;  in contrast, exports of products by the machinery industry only fell by -15% and metal products (a significant chunk of which is metal working sub-contractors) was down by just under -10%.

For UK imports of goods by industry, arrivals of all manufactured goods fell by -15% compared to 2019, with total engineering falling by -18% and the 4 key industries seeing a decline of -24%.  The trends between these 4 industries were more similar with the decline compared to 2020 ranging from -32% in aerospace and -24% in automotive down to -19% for both machinery and metal products.

It is worth noting that although both exports and imports in the 4th quarter were higher than in Q3-20, for exports this level was still below the position at the end of 2019 while for imports there was an increase for all manufactured goods while the figures for engineering were at about the same level as a year earlier.

You can get more details from the full set of data tables which are available on the ONS web-site at (18 March);  however, we can send you these tables including our analysis of the key industries - if you would like a copy of this please contact Geoff Noon at MTA (email: