MNI: UK Manufacturing Orders Ease Slightly in August: CBI

--August CBI Total Order Book Balance +7% Vs +11% Jul

By Jamie Satchi

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

August versus the previous month, but remained in robust territory, a survey for

the Confederation of British Industry released Tuesday showed. 

     --ORDERS REMAIN FIRM, EXPECTATIONS RISE 

     The August total order book balance fell to 7% in August, down four points

from July, but above the long-term average of -13%. 

     Despite easing, the headline index continued to signal robust conditions

among manufacturers. A sub-component of the headline index, the export order

balance, was unchanged at 9% for the third consecutive month, suggesting the

decline in overall orders was driven by softer domestic demand. 

     The volume of orders in the three months to July moderated to 21%, down

from 27% in July, implying that manufacturers carried the bulk of the strong

form displayed in Q2 over into Q3. 

     Firms were more optimistic about the coming three months, with the expected

volume of output measure rising six points to 20% -- significantly above the

long term average of 9%.

     --BEWARE 'NO DEAL' BREXIT

     "Manufacturing growth remains strong, supported by the lower level of

sterling and strong global economy. But risks to that growth remain high in

light of international trade tensions and the uncertainty caused by Brexit,"

said Anna Leach, CBI Head of Economic Intelligence.

     If Britain reverts to WTO trading terms post-Brexit, having failed to

secure a deal with Brussels, Leach said manufacturers in both the UK and EU

would suffer dislocation of operations.

     "Make no mistake, a 'no deal' scenario would be immensely damaging not just

for UK manufacturers, but also the rest of the EU. So both sets of negotiators

need to demonstrate flexibility and compromise to protect trade flows worth 600

billion euros each year, particularly against the backdrop of increasing

protectionist rhetoric," she added. 

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

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