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ECONOMIC NEWS

European Industrial Production, April 2021:  The latest data from Eurostat shows that industrial production in April increased (compared to March) by +0.8% in the Euro-zone and by +0.5% in the EU.  The comparisons to a year earlier are heavily distorted as this was the month with the largest impact from the Coronavirus pandemic but, for the record, Euro-zone output increased by +39.3% and for the EU growth was +38.7% compared to April 2020.

The capital goods industries did slightly better than the overall trend for the month-on-month comparison with output rising by +1.4% in the Euro-zone and by +0.8% for the EU as a whole.  This sub-sector was one of the hardest hit in the initial phase of the crisis, partly because of the almost total shutdown of the automotive industry in April 2020, so looking back over 12 months, output of capital goods grew by +65.4% in the Euro-zone and by +67.5% for the EU.

Normally we use the 12-month trend for the individual countries but as this has less meaning at the moment the month-on-month trend gives a better indicator of the current situation.  Among the 26 Member States that have published their figures for April 2021, 15 saw total industrial output higher than in March and 10 saw a reduction (France was unchanged).  The strongest month-on-month growth was in Belgium (+7.4%) and Malta (+5.6%) while the largest falls were in Denmark (-3.8%) and Hungary (-3.2%).

There are more details in the Eurostat euro-indicators publication which can be downloaded from their web-site at https://ec.europa.eu/eurostat/news/euro-indicators (14 June) or it can be requested from MTA.

USMTO and CTMR, April 2021:  The US Manufacturing Technology Orders (USMTO) programme tracks orders in the US market, based on the reports from participants.  In the first 4 months of 2021, orders were +40.0% higher than in the same period last year (January to April).  What we are seeing, of course, is partly a reflection of the trough from the initial impact of the Coronavirus outbreak, but it also reflects what was a relatively weak start to 2020 before Covid-19 came along.

The AMT Press Release points to the strength of demand being spread across a number of customer industries including automotive, mould & die, mining, energy exploration and electrical equipment.  Interestingly, it also mentions that US companies are holding open-house events which are attracting higher than expected attendances and that this suggests a renewed confidence in in-person sales calls and regular (as opposed to emergency) maintenance visits.

Because of confidentiality reasons, the full regional breakdown is not available but we do have figures for metal cutting machines - as these account for 96½% of the total reported for the first 4 months of the year, this is a good proxy for the regional market trend.  This breakdown shows large double-digit growth rates for 5 of the 6 regions, led by the North-Central-West (+67%) and North-Central-East (+62%) areas (these are the largest regions);  the exception is the South-East where orders fell by -1% compared to the first 4 months of 2020.

The US Cutting Tool Market Report (CTMR) tracks orders for tooling on a similar basis.  April 2021 marks the first month when the 12-month rolling total has turned positive, reflecting the fact that the initial impact on the market was seen in the same month last year;  however, the monthly totals are still below the levels that were achieved in the early months of 2020, so the recovery has some way to run yet and the year-to-date total for the first 4 months of the year is -6.4% lower than for the first four months of 2020.  There is no regional breakdown of the CTMR 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.

UK Trade by Industry, 1st Quarter 2021:  The ONS have published a breakdown of exports and imports of goods split up by industry for the 1st quarter of 2021.  We are going to focus on the trend compared to the previous quarter (4th quarter of 2020) as in the current period (and for the next couple of quarters) the comparison with a year earlier and the 4-quarter rolling trend will be affected by the sharp dip in activity in the middle of 2020.

In the 1st quarter of 2021, exports of goods from the Engineering industries accounted for nearly 52% of all manufactured goods exports, the highest proportion since the 3rd quarter of 2019.  This was despite a fall of -2.3% in exports compared to the previous quarter (total manufacturing exports fell by -7.2%);  taking out the electronic and electrical engineering industries, what we will call metal engineering (metal products, machinery, automotive and other transport equipment) saw exports fall by -1.7%.  By industry, only automotive recorded a quarter-on-quarter increase (+4.3%) in exports, although the aerospace industry was all but flat.

For UK imports, the Engineering industries as a whole accounted for almost 46% of total manufactured imports but recorded a fall of -13.6% in arrivals compared to the previous quarter - the metal engineering industries saw imports fall by -19.1%.  All of the industries saw imports lower than in the 4th quarter of 2020, with automotive having the largest reduction at -31.1%, followed by aerospace at -20.3%.

Overall the engineering industries had a trade deficit of £8.95 billion but with large deficits in the electrical and electronic sectors, the 4 metal engineering industries had a small surplus of £464 million.  However, this is entirely due to aerospace which recorded a trade surplus of £2.9 billion as the other three industries (and the remaining parts of the other transport equipment group) all had deficits in this quarter.

You can download the data files from the ONS web-site at https://www.ons.gov.uk/releasecalendar (16 June) or we can send you the version on which we have carried out the analysis above - contact Geoff Noon (email:  gnoon@mta.org.uk) if you would like a copy of this.