October CBI industrial trends surveys released yesterday continue to reflect business uncertainties post BREXIT – but a notable pick-up in export activity.
Order books were weaker overall (down to minus 17 from minus 5 in September), reflecting weaker domestic demand. But the export orders balance improved to match August’s highest level for two years.
The monthly survey also shows a significant easing back in output expectations for the next three months (down to +13 from +22 in September) although they are still relatively decent.
Domestic price expectations balance rose to match August’s highest level since February 2015, with manufacturers under pressure to raise prices as the weaker pound lifts costs. Manufacturers’ unit costs rose at the fastest rate for three years in October.
But the survey also showed manufacturers are more upbeat about export order prospects as the weakened pound boosts their competitiveness.
Indeed, the CBI survey reveals that manufacturers “competitiveness in EU markets rose at the fastest pace since the series began in 2000, with competitiveness outside the bloc also improving at the quickest rate since 2009.”
There was also a rebound in manufacturers’ investment intentions in October after suffering a hit in July in the aftermath of the Brexit vote.