UK Manufacturing Output, April 2022:  Data from the Office for National Statistics (ONS) shows that total manufacturing output fell by -1.0% in April although thanks to base effects, output in the latest 3 months (February, March and April 2022) was only -0.2% lower than in the previous 3 months (November and December 2021 and January 2022) and was +2.0% higher than in the same period of last year (February, March and April 2021).

For April, 8 of the 13 industry groups within manufacturing recorded a month-on-month fall in output, led by computer, electronic & optical products (-4.6%) and other manufacturing & repair (-4.2%).

At the sub-sector level, although most of them showed a month-on month fall in output in April (seasonally adjusted), there is more mixed picture in the rolling 3-month trends.  While intermediate goods output managed an increase of +2.6% compared to the previous 3 months and +5.2% compared to a year earlier, consumer goods output fell by -1.9% in the short-term but was +3.5% higher than in 2021;  however, it is the capital goods sub-sector that is of most interest to us and this saw declines in output of -1.7% compared to the previous 3 months and -3.1% over a year ago.  Only capital goods and energy have output lower than the same period in 2021.

We track output for 4 key industries which account for most of the demand for manufacturing technology equipment and the current star performer is the metal products industry.  Although output was flat in April, it has grown significantly throughout 2022 and in the latest 3 months, output is +7.5% higher than in the previous 3 months and +11.6% above the level in the same period in 2021;  in April, output in this industry was 108.1% of that recorded in February 2020 (the pre-pandemic marker).

That is pretty much where the good news ends although the automotive industry did manage to record a month-on-month increase in April;  however, despite this, output of this industry in the latest 3 months was -8.2% lower than in the previous 3 months and -16.2% below the level of a year earlier as the industry continues to suffer from a shortage of components, especially electronics.  This weakness is illustrated by the fact that output in April 2022 was only 68.7% of the pre-pandemic level – this industry had fully recovered the pandemic losses by the end of 2020 and in November that year was even above the most recent peak from the middle of 2019, so the current level dramatically illustrates the problems faced by this industry with the supply of components.

Output also fell on the rolling 3-month measure for the machinery group of industries, although not quite as dramatically as for the automotive industry with the latest period being -3.2% lower than the previous 3 months and -3.9% down on a year earlier.  There is also slightly better news in that the April level was 97.1% of the pre-pandemic level.

Finally, output of the aerospace industry may have stabilized with a reduction of only -0.1% compared to the previous 3 months although this is still -10.1% down on the same months in 2021.  However, the April 2022 figure is only 59.5% of that recorded before the pandemic started (February 2020).

You can download the ONS Statistical Bulletin from their web-site at (13 June) or request it from MTA;  we also have an analysis of the key industries which is available to members – please contact Geoff Noon ([email protected]) if you would like these charts.


UK GDP, April 2022:  The GDP data released by the ONS last week showed a month-on-month fall of -0.3% for April;  this is the 2nd successive negative month but across the rolling 3-month period, GDP was +0.2% higher than in the previous three months.  The latest monthly fall means that GDP is only +0.9% higher than its pre-pandemic level (for the monthly series this is February 2020 although the pre-pandemic peak month was October 2019).

We have already seen the fall in manufacturing output for the month but April also saw a fall in output for the services and construction sectors – this is the first time that all three major sectors have seen a fall since January 2021 at the height of the 2nd lockdown.  The month-on-month fall in construction output of -0.4% is at least in part due to a record high in March when there was significant repair activity following the storms in February.  Construction output in the latest 3 months was +2.9% higher than in the previous 3 months.

Overall service sector output fell by -0.3% in April and the rolling 3-month trend was flat compared to the previous 3 months period.  We normally prefer to focus on the latter measure as it smooths out some of the monthly noise in the data but on this occasion, the monthly data is more relevant.  The main cause of the fall in service sector output was from a decrease of -7.6% in the human health category as a result of a significant reduction in NHS Test & Trace activity following the changes in policy across the UK but mainly in England.  With weighting, this more than accounts for the overall fall in service sector output in April.

The largest growth in activity came from the wholesale, retail & repair of motor vehicles which had fallen sharply in March with very weak new car registrations from the change of licence plate number.  This is mainly a story of the seasonal adjustment which looks for a large increase in March and then a fall back in April;  neither of these happened this year because of the well-known problems in supply of new vehicles, so the seasonally adjusted data interprets this as an increase in April.

Output of consumer-facing services increased by +2.6% in April following a fall of -1.8% in March and there was also a rise of +1.4% in retail sales.  Despite this, output of the consumer-facing services sub-sector was still -4.4% lower than the February 2020 (pre-pandemic) level while the rest of the service sector was +2.6% higher.

There are more details in the range of ONS Statistical Bulletins which can be downloaded from their website at (13 June) or on request from MTA.


CBI Industrial Trends Survey, June 2022:  The latest results from the CBI Industrial Trends Survey (ITS) show an easing in growth for both output and orders, although these metrics are still well above their long-run average.  It is also worth noting that although dated “June”, the data collection period ran from 25 May to 13 June, so any data really refers to May.  This is important in trying to tie up these results with the manufacturing output data noted above.

Manufacturing output growth in the latest 3 months slowed slightly compared to the previous survey and a further small deceleration is indicated for the coming 3 months but both of these indicators are significantly above their long-run average and still point to reasonable growth in activity.  There is also good news because 12 of the 17 sub-sectors covered by the ITS saw an increase in output with the largest contributions to the headline balance coming from the automotive and aerospace sub-sectors;  food & drink made a negative contribution for the first time in over a year.

Following a strong increase in the previous survey, total order books fell back a little but remain significantly positive;  it seems likely that this was mainly due to export activity with these orders books (there is no data for domestic orders) falling back to a neutral position following the strong positive balance in the previous survey.

Stocks of finished goods improved to a neutral position, their best level for some time and expectations for price increases over the coming months eased to their lowest since September 2021 but remain very high.

You can get the Press Release of the CBI ITS from their web-site at (21 June) or request it from MTA (we can also provide a summary of the results).


Bank of England Agents Report, 2nd Quarter 2022:  In conjunction with last week’s meeting of the Monetary Policy Committee at which they voted to increase the Bank’s base rate to 1.25%, the Bank has released the summary of the Agents’ Summary of Business Conditions.  For manufacturing they report that output growth eased slightly in the face of shortages of materials and components.  There was some variation between industries with strong demand for food, electrical and electronics sectors but consumer goods makers reported a softening in demand.

The Agents reported that their contacts said that supply shortages had worsened since Russia’s invasion of Ukraine and following Covid-related lockdowns in China, with labour shortages remaining acute, leading to increased backlogs of work and longer delivery times, particularly in the automotive sector.

Investment intentions remained positive overall with contacts increasingly considering investing in energy-saving measures, especially in manufacturing.  Although not specifically aimed at our sector, some contacts reported that they were re-assessing investment plans as the risks around the ROI have grown, especially because of the war in Ukraine.

It is also worth noting that the MPC voted 6-3 to increase the Bank Rate by 25 basis points – the minority in the vote all wanted a larger increase of 50 basis points, sending a clear signal that the Bank expects further increases.  Most commentators agree with this view and our colleagues at Oxford Economics anticipate three further rate rises this year taking the Bank Rate to 2% by the end of the year.  However, they then expect the first move in 2023 will be down as the rate of inflation eases.

You can access the Bank’s Agents’ report at or request it from MTA.

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