CBI Industrial Trends Survey, May 2023:  The latest results from the CBI Industrial Trends Survey showed another fall in output in the three months to May* and respondents to the survey expect it to fall in the coming three months as well.  The pace of decline did ease a little from the April survey but we now have 6 consecutive months with negative balances for past output.

This decline was repeated in 9 of the 17 sub-sectors in the survey report, with the latest decline driven mainly by the motor vehicles & transport equipment, chemicals and food & drink groups.

Total order books were reported to be below normal and at broadly the same level as we have seen in all 5 of the surveys so far in 2023 (although the January survey was really about December 2022).  This reading (-17) is also a little below the long-run average trend and, in the context of the survey, this is more important than the actual reading.

Export order books weakened significantly compared to the April* survey but the previous result now looks like a blip as the latest reading is in line with the results from December to March*.

Stocks of finished goods were eased in May* but is back on the long-run average and around the level we saw in the 4 surveys before April*.

*  Note that although this survey is dated May, the data collection took place between 2nd and 16th February so the results are likely to refer to the 3-month periods from February to April 2023 (past) and May to July 2023 (future).

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


UK Productivity, 1st Quarter 2023:  The Office for National Statistics (ONS) published its flash estimate of productivity last week.  The preferred measure of productivity is output per hour and on this basis, productivity was -0.6% lower than a year earlier while the alternative measure of output per worker fell by -0.9%.  The fall came about because hours worked rose more quickly than output (Gross Value Added – GVA).  This data is for the whole economy.

However, the picture is a little more positive if we compare the latest period with then average for 2019 (taken to represent the pre-pandemic level);  here, output per hour increased by +0.6% which is entirely generated by the increase in output (GVA) as hours worked was unchanged.

We can drill down to the industry level where we get a different picture, although note that there is a pay-off between detail and reliability.  For the manufacturing sector, output per hour was -2.1% lower than in the 1st quarter of 2022 with a fall in output combined by fractionally more hours being worked;  however, looking back the 2019 average level, productivity increased by +11.2% as a combined result of GVA rising and hours worked falling.

We can go further down to the industry level.  Compared to a year ago (Q1-22), output per hour fell by -4.3% for the basic metals & metal products industries, by -7.5% for machinery and by -7.1% for manufacturers of transport equipment (mainly automotive & aerospace).  In all cases this was the product of falling output and more hours being worked.

Looking back to the pre-pandemic period, output per hour increased by +15.4% for basic metals & metal products industries and by +33.8% for machinery manufacturers but declined by -6.5% for manufacturers of transport equipment.  The increases came from more output and fewer hours worked, while in the transport equipment group, GVA fell by more than hours worked.

You can download the ONS Statistical Bulletin from their website at https://www.ons.gov.uk/releasecalendar (16 May) or you can request them from MTA.


UK Annual Business Survey, 2021:  The ONS has also published the results of the 2021 Annual Business Survey.  Although this is now somewhat “old data” and is, ostensibly, a high-level structural exercise, it does provide some useful snippets of information which can be used as a basis from which estimates can be made of the breakdown of more up to date sources.

The headline figure shows that gross value added of the UK non-financial business economy grew by +14.6% and, on a regional basis, the fastest growth was in Yorkshire & Humberside (+24.7%) and the South-West (+23.7%).

However, the value for us comes in the detailed breakdown by industry;  as well as giving figures on things like turnover, capital expenditure and the number of enterprises for manufacturing, there is a detailed breakdown by industry.  This enables us to calculate various aggregates as well as to get the figures for specific industries.  For example, we can see that net capital expenditure by metal machining sub-contractors fell by -41% in 2021 although this is, perhaps, a bad example as they had an exceptional year in 2020.  Sub-contractors in metal forming processes saw their net investment figure increase by +35%.

Overall, the metal manufacturing group – our 4 key industries of metal products, machinery, automotive and other transport equipment) saw net capital expenditure fall by -6.0% compared to 2020 which meant that it only accounted for 28% of total manufacturing investment – in part this is because the manufacturing sector as a whole saw investment increase by +6.2%.

You can download the ONS Statistical Bulletin and data files from their website at https://www.ons.gov.uk/releasecalendar (18 May) or you can request them from MTA.

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