CBI Industrial Trends Survey, February 2022:  The latest results from the CBI Industrial Trends Survey (ITS) shows that while manufacturing activity improved in February (data collection from 26th January to 14th February), so did price pressures.  Total order books eased slightly from the level of the previous three months but remain at an historically high level and there was a moderate improvement in export demand which remains above the long-run average.

The growth in output over the last 3 months accelerated compared to the previous reading and is also well above its long-term average.  Output increased in 13 of the 17 sub-sectors, led by the chemicals and food & drink industries;  however, it is worth noting that this balance was negative for the mechanical engineering (machinery) industry.

The measure of the adequacy of stocks of finished goods remained negative but improved for the 2nd month in a row.  The balance of responses from manufacturers expecting to raise prices over the coming three months was at its highest since December 1976.

You can get the Press Release of the CBI ITS from their web-site at www.cbi.org.uk/media-centre (22 February) or request it from MTA (we can also provide a summary of the results).


UK Investment, 4th Quarter 2021:  One element of the GDP data package published by the Office for National Statistics (ONS) a couple of weeks ago was the latest figures for investment.  At the high level, it shows that total business investment was +0.9% higher than in the 3rd quarter but -0.8% below the level of a year earlier and 2021 as a whole was -0.7% lower than 2020 and the lowest since 2014.

Based on spending by asset type, the most relevant category for us is “ICT & Other Machinery”.  The figures here are a little more encouraging as, although the quarter-on-quarter trend was -0.6%, the level was +10.1% higher than in Q4-20 and the total for 2021 showed growth of +13.4%;  for the full year, spending in this category of assets accounted for 32.2% of total business investment, the highest rate since 2014.  Of course, this is a very broad category and includes far more than just spending on manufacturing technology and, while it is likely that the pandemic induced a significant increase in spending on ICT for all that working from home, it is still a valuable indicator.

The other way to look at data relevant to our industry is by industry.  Again, the data is fairly high level and includes all types of investment such as buildings and vehicles as well as machinery and equipment, but the indicators are useful.  In the latest period, total investment by the manufacturing sector was -2.6% lower than in the 3rd quarter but was +2.8% higher than a year earlier;  for 2021 overall, capital expenditure increased by +8.1%.  The manufacturing sector accounted for 17% of total business investment in 2021.

Within manufacturing, the Engineering & Vehicles (E&V) industries (the most detailed level at which the published data is available) saw a fall in investment of -6.8% compared to Q3-21 but this was +2.4% higher than in Q4-20 and the total for 2021 showed an increase of +6.4%.  Overall, the E&V industries accounted for 46% of total manufacturing investment in 2021.

You can download the ONS Statistical Bulletin and the investment data files from their web-site at https://www.ons.gov.uk/releasecalendar (11 February) or if you contact Geoff Noon at MTA ([email protected]) we can send you our analysis of the investment data most relevant to our industry that is covered in this article.


UK Productivity, 4th Quarter 2021:  The flash productivity data from the ONS showed that output per hour worked for the whole economy was +1.0% above the level of the 3rd quarter and +0.5% higher than a year earlier.  Taking the average for 2019 as the benchmark for before the Coronavirus pandemic took effect, the latest figure for output per hour is 2.3% higher.

This release also has a breakdown of this data by sector and industry.  In contrast to the whole economy data, manufacturing output per hour worked fell by -1.3% compared to the previous quarter and was -1.5% lower than in Q4-20;  however it increased by +4.4% compared to the pre-pandemic level (2019 average).  The key to this weaker short-term performance in the in the industry detail.

Within manufacturing, the industry level breakdown shows output per hour in the machinery industry was -8.6% lower than in the 3rd period of 2021 with a fall of -9.8% for the transport equipment industry (mainly automotive and aerospace) but an increase of +4.5% for the basic metals & metal products group.  Comparing with the average for 2019, output per hour worked increased by +3.9% for the basic metals & metal products group and by +1.3% for machinery but fell by -24.6% for the transport equipment industries.

This highlights the problems arising from the supply chain shortages that have hit the automotive industry in particular.  The massive reduction in output per hour in this industry comes because of a fall in output of -27% while hours worked are only down by -4%.

The other main measure of productivity is output per worker but, of course, this was affected by reduced hours being worked during the pandemic, especially with staff placed on furlough.  However, for the whole economy, output per worker in the 4th quarter of 2021 was +0.8% above the pre-pandemic level.

You can get the ONS bulletin and the data tables from their website at https://www.ons.gov.uk/releasecalendar (15 February) or request them from MTA.

To top