MNI: Manufacturing Activity Softens But Remains Robust: CBI

--CBI Industry Dec-Feb Total Order Book Balance Next +10% Vs +14% 3m to Jan

By Jamie Satchithanantham

     LONDON (MNI) - UK manufacturing output remained robust, despite softening

in the three months to February, with output inflation expectations receding

from January's multi-decade high, a survey released Tuesday showed.

     The CBI Industrial Trends total order book balance for the

December-February period moderated to +10% from +14% in January, but still

remained well above the long run average of -14%.

     The softening in activity was driven by decreased orders at both home and

abroad. The volume of export orders index, which has led the rise in activity

over the past months, fell to +10 from +19 in the three months to February, the

lowest since the three months to October. 

     Alongside the decline in February activity, output expectations over the

forthcoming three months also abated with the respective percentage balance

falling eight points to +16%. Again, despite the fall this index remained well

above the long run average of +9%.  

     After rising to a 34-year high in January, expectations for output price

inflation returned to levels more consistent with the trend set over the course

of 2017. The balance fell sharply to +25% in February from +40% in January and

reflects expectations that import-induced inflation are likely to abate over the

course of the year.

     "This month saw another strong showing from UK manufacturers. Although

order books weren't quite as buoyant as they were last month, demand remains

strong and output grew briskly," said Rain Newton-Smith, CBI Chief Economist.

     "With the Brexit negotiations reaching a critical juncture, many businesses

are concerned about future barriers to trade and are looking for clarity over

the future relationship with the EU," she added.

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

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