CBI Industrial Trends Survey, November* 2023: The latest results from the CBI Industrial Trends Survey (ITS) shows that manufacturing output volumes fell in the 3 months to November* and was at its most negative since the August* dated survey. Output is expected to fall again in the coming 3 months, although at a slightly slower pace.
Output fell in 10 of the 17 sub-sectors covered by the ITS, with the chemicals, mechanical engineering (machinery), metal products and metal manufacture industries the most negative.
Total order books were reported to be below “normal” in November* (at -35), with a sharp deterioration from the previous month (-26) and at their weakest since January 2021. There was a similar fall for export order books which fell from -23 in the October* survey to -31 in the latest figures – for this series, it is the weakest reading since February 2021.
Stocks of finished goods were seen as broadly “adequate” and were below the long-run average for this indicator.
* Note that although this survey is dated November, the data collection took place between 25th October and 14th November so the results really cover the 3-month periods from August to October (past) and November 2023 to January 2024 (future).
You can get the Press Release of the CBI ITS from their website at www.cbi.org.uk/media-centre (22 November) or request it from MTA (we can also provide a summary of the results).
Flash Purchasing Managers Index, November 2023: The flash manufacturing Purchasing Managers’ Index (PMI) for November suggests that there has been a significant improvement in the sector in the UK, but (and it is a big “but”), at 46.7, it is still well into negative territory. The implication of this indicator (note that it is not data but illustrates the trend) is that output is falling less quickly than it was over the Summer, with the overall manufacturing PMI at its highest since May. This was also reflected in the sub-index for output which also showed an improvement to a less negative reading than in October.
In the Euro-zone as a whole, there was a similar but lesser trend with the manufacturing PMI moving up to 43.8, from 43.1 in October – while the actual level of the PMI is not directly comparable, it does suggest that the reduction in activity in the manufacturing sector is still more rapid than in the UK. The fall in output also eased to its least rapid since May, but it remains significant. Employment in manufacturing fell at its fastest pace since August 2020.
Only France and Germany have individual releases at the flash stage and they show modest movements compared to October but in opposite directions. For the past six months, Germany (and Austria) have had by far the weakest manufacturing PMI readings and the November figures suggest an improvement but only to 42.3 which is still a very poor number which, again, is the “best” since May. This was helped by output falling less quickly and there was also a slower reduction in new orders, but the fall in the number of employees in manufacturing was the quickest in more than 3 years (employment will often lag the cycle).
In contrast, France saw a slight fall in the manufacturing PMI in November, as output contracted at a faster pace; the PMI reading of 42.6 was the lowest since the height of the pandemic in May 2020. Employment also fell at its fastest rate since that date.
With the USA data not published until this afternoon due to the Thanksgiving holiday, the only other country for which we have the flash PMI at the moment is Japan. They also saw the flash PMI for manufacturing fall from its October reading but at 48.1 it is not as weak as the UK or in Europe; however, for Japan, it is the weakest reading since February. Both output and orders fell and employment was reduced for the 2nd month in a row.
These reports (including the US figures later today) are available on the “PMI by S&P Global” website at https://www.pmi.spglobal.com/Public/Release/PressReleases or on request from MTA.
UK Productivity, flash estimate, 3rd Quarter 2023: The Office for National Statistics (ONS) has published estimates for UK labour productivity but these are hampered by problems in the Labour Force Survey (LFS) – the source of the data on hours worked and number of employees – which means that these inputs have been estimated from other sources. This creates a higher degree of uncertainty than usual and has also led to the suspension of the industry specific information that we normally comment on.
The data that has been published suggests that output per hour across the whole economy was -0.2% lower than in the previous quarter and -0.3% down on the same period last year (Q3-22) but was +2.5% higher than before the Covid pandemic – for this series, this is taken to be the average of the 4 quarters in 2019.
Data on output per worker, which is less useful as an indicator of productivity but has more reliable data inputs at this stage, shows changes of -0.2%, -0.1% and +1.6% respectively.
You can get more details on the data problems and the estimation methods used by the ONS in the Statistical Bulletin which can be downloaded from their website at https://www.ons.gov.uk/releasecalendar (21 November) or on request from MTA.