MNI: UK Manufacturing Orders Bounce Back in Jun: CBI

--June CBI Total Order Book Balance +13% Vs -3% May

By Jamie Satchi

     LONDON (MNI) - Growth in UK manufacturing order books and output volumes

rebounded strongly in June, signalling a potential uptick in the sector's

fortunes as we close out the second quarter, a survey from the Confederation of

British Industry showed Wednesday. 

     --ORDERS HIGHEST SINCE JAN

     The June total order book balance rose to 13% in June, considerably higher

than the -3% May result and the highest since the opening month of the year. The

export order balance also found room to grow, inching up a touch to 9% from 8% a

month prior. 

     The volume of orders in the three months to June soared to 19%, up from 3%

in May, suggesting activity may have found a higher gear in the final month of

the quarter. Firms were slightly more conservative about their perceptions for

the forthcoming three months, however, with the expected volume of output

measure dropping nine points to 18% - but still above the long term average of

9%.  

     --CORNER TURNED?

     "The recovery in orders and a return to bumper growth in production

suggests the lull in manufacturing activity may be over," Anna Leach, CBI Head

of Economic Intelligence, said.

     Official data has shown the manufacturing sector lose the momentum that

spurred much of the growth in overall production over the second half of last

year. Output rose by just 0.2% q/q in Q1, after bumper rises of 1.1% and 1.3% in

Q3 and Q4 of last year.

     Output fell again in April, down 1.4% m/m, but the latest data from CBI

indicate the sector may have found found form exiting spring into the summer

months.      

     --PRICE PRESSURED EXPECTED TO EASE

     The survey showed expected pipeline inflation pressure to ease over the

coming quarter, after resuming a general trend that took a pause in May.  

     A net 13% of manufacturers expected average prices to rise over the next

three months, down from 19% in May and further adrift of the respective February

and January outturns of 25% and 40%. The long run average prices balance is just

3%, however.

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

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

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