MNI DATA ANALYSIS: CBI Industrial Trends Posts Bounce In Feb

--February CBI Total Order Book Balance +6% Vs -1% January

By Jai Lakhani

     LONDON (MNI) - UK manufacturing orders picked up in February from January's

unflattering reading, coming in at +6 in February, the latest CBI Industrial

Trends Survey showed. 

     However, this did little to argue against a broad slowdown, with the volume

of output in the three months to February down 9 points at +7. 

     --MONTHLY ORDERS OUT OF THE RED

     Some consolation can be taken from the fact that output growth on a monthly

basis pulled out of the red and the long-run average of -13 suggests the

February reading of +6 is a healthy reading. 

     Export order book growth also recovered, moving to +1, which, according to

the CBI report, can be considered "normal levels" after January's 19 point fall

to -5. 

     Whilst output volumes in the three months to February moderated, it does

remain roughly in line with the long run average at +7 compared to the average

of +4. Growth was reported in 9 out of 17 sub-sectors and the winners appeared

to be unchanged from January with chemicals and food, drink and tobacco driving

growth.

     Unsurprisingly, the sub-sectors that languished were motor vehicles and

transport equipment and mechanical engineering. 

     --BUSINESS EXPECTATIONS FAIRLY SUBDUED

     Expectations for output growth in the next three months are at +8, down 6

points from January and also below the long-run average of +9. This appears to

suggest survey respondents expect more sluggish activity in the backdrop of the

continuing Brexit conundrum. 

     Expectations of output price inflation for the next three months rose for a

third consecutive month to +22 from +18 in January. The long-run average is

significantly below these levels at +3.  

     --BREXIT IMPEDING MANUFACTURING 

     February's reading further validates the needs for a Brexit agreement,

especially given the added headwind of a weaker global trading environment. 

     As Anna Leach, CBI Head of Economic Intelligence, said: "UK manufacturing

activity has moderated at the same time as headwinds from Brexit uncertainty and

a weaker global trading environment have grown... it is of critical importance

that politicians of all stripes and on both sides of the channel come to

agreement on the terms of a Brexit deal as soon as possible, to allow our

manufacturers to continue to create, make and trade their goods with certainty."

     --POLITICAL PARALYSIS HURTING THE SECTOR 

     "We are now just weeks away from the very real prospect of a 'no deal'

Brexit which would be hugely damaging to manufacturers up and down the country.

The political paralysis of Brexit must urgently give way to compromise and an

acceptable deal being struck," Tom Crotty, Group Director of INEOS and Chair of

CBI Manufacturing Council, 

--MNI London Bureau; +44 203 865 3828; email: jai.lakhani@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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