UK National Accounts, 2nd Quarter 2023:  The Office for National Statistics (ONS) published the UK National Accounts for the 2nd quarter.  In the short-term, the main pints to note is that GDP growth is unrevised at +0.2% for the 2nd quarter but Q1 ha been moved up to +0.3% from +0.1% in the previous release of the data.

As a result of these changes, at the end of the 2nd quarter, the UK economy is estimated to have been +0.6% larger than a year earlier – this is an upward revision from the +0.4% in the previous publication.

However, the main news is that this data release incorporates major revisions to the UK economic data back to 2020 (and earlier but these only affects levels and not the trends).  This comes as the ONS makes its final adjustments to economic data arising from new data inputs (mainly from annual economic surveys), new methodology to improve estimates of the impact of the global supply chain (particularly important during the pandemic) and re-estimation of import data to remove double counting that occurred as a result of the post-Brexit change in methodology for collecting figures for trade (especially imports) with the EU.

Prior to this data release, the UK economy was estimated to have contracted by -11.0% in 2020 (affected, of course, by the initial pandemic lockdowns) and then grown by +7.6%.  With only modest growth since then, the economy was estimated to have still been slightly smaller in Q2-23 than immediately before the pandemic (for quarterly time series, this is taken to have been Q4-19).

With these revisions, the UK economy is now estimated to have got back to its pre-pandemic size as long ago as the 4th quarter of 2021.

There are also changes at the sector and industry level, although we only have the details for the major groupings – the latter figures will come out with the August output data in a couple of weeks’ time.  What we do know about the manufacturing sector is that:

  • It was the only part of the economy to grow in 2020 and that this has been revised up to +2.2% (from +0.1%)
  • For 2021, while output of the sector expanded by +1.6%, this is only a fraction of the previous estimate of +9.7% growth.  This looks to be partly a base effect from the stronger growth in 2020 but instead of maintaining the level of Q4-20 (which was way above the pre-pandemic figure) through most of 2021, there is now a noticeable fall in the level of output.  From indications given by the ONS, we think at least some of our customer industries have been affected by this revision.
  • For 2022, output of the UK manufacturing sector is now estimated to have contracted by -3.3% – this is an upward revision from the -3.7% figure in the previous data release.

These revisions are particularly frustrating as we are in the middle of the latest round of forecasts for the manufacturing technology sector.  We will be presenting these at our Forecast Seminar on Thursday 19th October – see for more details and to register – and we would encourage you to come along and hear our latest predictions for both your market and that of your customers.

You can download the ONS Statistical Bulletin for the National Accounts from their website at (29 September) or request it from MTA.


UK Business investment, 2nd Quarter 2023:  Publication of the National Accounts data also brings with it an update on business investment;  this is now estimated to have grown by +4.1% compared to the 1st period of the year (up from the initial figure of +3.4%) and to be +9.2% higher than a year ago (previously 6.7%).

Despite assurances that the industry breakdown which would enable us to identify the trends for the manufacturing sector would be available from this data release, the relevant data series still only go up to the 2nd quarter of 2022. This means that the only breakdown we have is by asset type, although there are some useful pointers from this information.

One of the categories is for spending on “ICT & Other Machinery” (ICT&OM) which is particularly useful given that this was the target area for the super-deduction scheme which ended in March of this year and is also where most capital expenditure on manufacturing technology will be included.  The latest estimates here show spending in the 2nd quarter was -0.4% lower than in Q1 (previously -9.8%) and +5.8% (up from +1.5%) a year earlier.

What is surprising is that the spike in spending on ICT&OM in the 1st quarter of 2023 as the super-deduction scheme ended (and which ties up with our data on the UK machine tool market) has been revised away.  Indeed, this is the main reason why the Q2/Q1 trend noted above is now flat instead of showing a sharp fall.  This only adds to the frustration at the absence of the data for manufacturing which would have given a useful cross-check.

You can download the ONS Statistical Bulletin on Business Investment from their website at (29 September) or request it from MTA.


CBI Industrial Trends Survey, September* 2023:  The results from the CBI Industrial Trends Survey (ITS) which was published at the end of last week showed that manufacturing output fell at a slower pace than in the previous survey (the three months to August*) but that it is expected to be stable in the coming 3-month period, although this is still below the long-run average.  Output fell in 9 of the 17 sub-sectors in the CBI survey with the weakest industries being motor vehicles & transport equipment, chemicals and paper, printing & media.

Moving in the opposite direction were order books which fell again and a slightly faster pace than in the previous survey – this was also the fastest pace since the April* survey and below the long-run average level for this measure.  Export order books also deteriorated at a faster and below average pace, although this was not as bad as in the June* survey.  Although not measured, the implication is that domestic orders fell at about the same pace as in the August* survey.

Stocks of finished goods were seen as being above “adequate” but despite increasing slightly from the previous survey, they were still just below the long-run average.

*  Note that although this survey is dated September, the data collection took place between 24th August and 12th September so the results really cover the 3-month periods from June to August (past) and September to November (future).You can get the Press Release of the CBI ITS from their website at (22 September) or request it from MTA (we can also provide a summary of the results).

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