CBI Industrial Trends Survey, February* 2024:  The February dated edition of the CBI Industrial Trends Survey (ITS) points to a fall in manufacturing output across almost all of the sub-sectors and industries.  Manufacturing output volumes fell in the 3 months to February* and at a sharper pace than in the period to January* and back to the rate we saw last August*.  Output is expected to rise marginally in the 3 months to May*.

Output fell in 15 of the 17 sub-sectors covered by the ITS in the 3 months to February*, with the chemicals, automotive & other transport equipment, metal products and building materials industries given a specific mention as the weakest elements of the sector.

Total order books were reported as being below “normal” in February* but were less so than in the January* survey (-20 from -30), although they remain below the long-run average.  There was a similar trend for export order books which “improved” from -27 in the January* survey to -14 in the latest figures;  the latest reading is a little above the long-run average for export order books relative to “normal”.

Stocks of finished goods were seen as being more than “adequate” in February*, although at +11, this was less so than in the January* survey (+18) and were just about on the long-run average for this indicator.

*  Note that although this survey is dated February, the data collection took place between 25th January and 13th February so the results really cover the 3-month periods from November 2023 to January 2024 (past) and February to April 2024 (future).

You can get the Press Release of the CBI ITS from their website at www.cbi.org.uk/media-centre (21 February) or request it from MTA (we can also provide a summary of the results).


UK Trade, 4th Quarter 2023:  Data published by the ONS last week shows that in the 4trh quarter of 2023, imports of goods increased by +0.7% compared to the 3rd period of the year, while exports declined by -0.4%.  Note that these measures are on the basis of excluding trade in precious metals to avoid the distortion that comes from trade in non-monetary gold.

As a result of this, total goods exports from the UK declined by -4.4% in 2023 but with imports falling by -8.2%, the trade deficit eased to £205.3 billion – still high by historical standards but lower than the £240.1 billion recorded in 2022.

Returning to the quarterly data (the ONS bulletin does not give an easy breakdown for the full year data), the fall in goods imports was entirely due to a reduction in arrivals from outside the EU;  these fell by -0.8% compared to the 3rd quarter, mainly due to reductions in clothing from China and Bangladesh and in unspecified material manufactures that were partly balanced by an increase in fuel imports (mainly gas from Norway.  On the same basis, imports from the European Union were +1.9% higher than in Q3-2023 thanks mainly to a rise in imports of machinery & transport equipment (mainly cars and aircraft from Germany) and a rise in fuel imports, partly balanced by a reduction in arrivals of chemicals.

On the export side, deliveries to the EU fell by -1.1% compared to Q3 thanks to a decline for both chemicals (led by organic chemicals to Ireland) and fuel (crude oil to the Netherlands) that was partly balanced by an increase in shipments of machinery & transport equipment – led by exports of mechanical machinery and aircraft to Germany.  For the rest of the world, exports edged up by +0.3% on a quarter-on-quarter basis thanks to increases for material manufacture and fuels – the latter mainly in crude oil to China – that was partly balanced by a reduction in deliveries of unspecified miscellaneous manufactures and machinery & transport equipment.

Finally, for metal working machine tools, UK export fell by -5% in 2023;  deliveries to the EU increased by +9% but this was more than outweighed by a decline of -18% for the rest of the world;  in the latter group, exports to the USA fell by -42% which meant this market moved from the top spot in our league table of export markets (it had held this since 2020).  The fall in exports was most marked in the metal forming machine categories (-29%), with overseas deliveries of metal cutting machines increasing compared to 2022 (+9%).

Imports of metal working machine tools grew by + 11% in 2023; this was entirely due to a rise of +24% in arrivals from the European Union, while imports from the rest of the world declined by -5%;  the latter was despite an increase of +29% in machines from the USA, with China and Taiwan showing the largest percentage reductions among the major source countries.  For imports, there was an increase of +9% for metal cutting machines and +15% for metal forming equipment in 2023.

You can download the ONS Statistical Bulletin on trade from their website at https://www.ons.gov.uk/releasecalendar (15 February) or request if from MTA.  The data for machine tools is available from MTA.


UK Productivity, 4th Quarter 2023:  The flash estimate of productivity published by the ONS shows that output per hour worked was -0.3% lower than in the final quarter of 2022;  this was because gross value added (GVA – the measure of output) fell while the number of hours worked was flat.  Output per hour worked remains +2.0% higher than its pre-pandemic level (taken to be the average for 2019) with GVA being 1.4% higher and hours worked falling by -0.6% over this period.

For 2023 as a whole, output per hour worked was unchanged compared to the previous year but there was a fall of -0.6% in terms of output per worker.  The number of workers increased more than the hours worked in 2023, so the average hours worked per worker fell.

These figures are for the whole economy and we don’t yet have the industry breakdown for the 4th quarter.  However, in the 3rd quarter of 2023, output per hour worked in manufacturing was +5.7% higher than a year earlier and +10.6% above the pre-pandemic level (2019 average).  In both cases this is driven by a combination of an increase in GVA and a fall in hours worked, although the latter has a greater impact on the pre-pandemic comparison.You can download the ONS Statistical Bulletin on productivity from their website at https://www.ons.gov.uk/releasecalendar (15 February) or request if from MTA.

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