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MNI: UK Preliminary Data Forecasts - Oct IOP, Trade

MNI (London)
Repeats Story Initially Transmitted at 17:45 GMT Dec 1/12:45 EST Dec 1
By Jamie Satchithanantham
     LONDON (MNI) - UK short-term production indicators will be published on Dec
8, giving an early indication as to how the final quarter of the year started.
     At 0.7% m/m, manufacturing growth in September turned out the best
month-over-month performance in nine months, expanding for the fifth consecutive
month. It meant that on a quarterly basis, the sector returned to growth, up
1.1% in Q3 versus the 0.3% fall registered in the second quarter.
     While the soft data has generally been a lot more upbeat than the ONS'
numbers this year, October's survey data was conflicted. The IHS Markit
manufacturing PMI nudged up ever so slightly, from 56.0 to 56.3, while the CBI
total order books balance dropped a considerable nine points to -2 (an 11-month
low). 
     As such, analysts see both total industrial production and manufacturing
output expanding by 0.2% m/m in October, extending the view that the sector is
in solid shape and continues to see support both domestically and overseas.
     With October slightly warmer than September, a fall back in monthly
utilities output could be on the cards according to the notes of some of the
analysts notes in this preliminary survey. 
------------------------------------------------------------------------
                           Oct         Oct            Oct            Oct
                    Industrial  Industrial  Manufacturing  Manufacturing
                    Production  Production         Output         Output
                         % m/m       % oya          % m/m          % oya
Date Out                08-Dec      08-Dec         08-Dec         08-Dec
Median                     0.2         3.6            0.2            4.1
Forecast High              0.4         3.9            0.3            4.1
Forecast Low                 0           2              0              4
Standard Deviation         0.2         0.7            0.2            0.2
Count                        6           4              4              3
Prior                      0.7         2.5            0.7            2.7
Credit Suisse              0.2         N/A            N/A            N/A
Commerzbank                0.2         N/A            N/A            N/A
Investec                   0.1         3.6            0.3            4.1
Nomura                     0.0         3.5            0.0            3.8
Oxford Economics           0.4         3.9            0.3            4.1
Standard Chartered         N/A         2.3            N/A            N/A
UniCredit                 -0.1         N/A           -0.2            N/A
     Despite the marked fall in sterling since the Brexit vote the UK's trade
position has hardly changed. In June 2016, the month of the EU referendum, the
trade deficit stood at stg3.614; fourteen months later in September it was only
stg0.860bn better of. 
     While UK export volumes have picked up, this has been offset by resilient
demand for imports in conjunction with a considerable rise in import prices.
     September's Trade data did show some tentative signs of this changing.
year-over-year exports of goods excluding oil and erratics were up 13%, up from
12% in October, while the same measure of imports were up only 7%, down from 10%
in October.   
     For context, since last September this measure of exports had averaged
growth of 13% y/y while that of imports imports had average growth of 13%. 
     Trade data has been very erratic, led by unpredictable components such as
non-monetary gold, making it difficult to gauge whether there has been any
material change since Brexit. 
     On the other hand, perhaps with inflation at 3% and household incomes well
and truly squeezed, wage growth muted, consumer confidence abject and the global
economy (and the Eurozone in particular) in better health, a trend of an
improving UK trade balance perhaps could have started to gain traction in
October.   
     The trade deficit narrowed to stg2.8bn in September from stg3.5bn in August
and the analysts surveyed here on balance see the deficit broadly unchanged at
stg2.9bn.
------------------------------------------
                              Oct      Oct
                            Total  Visible
                    Trade balance    Trade
                           stg bn   stg bn
Date Out                   08-Dec   08-Dec
Median                       -2.9    -11.4
Forecast High                -2.5    -10.9
Forecast Low                   -5      -12
Standard Deviation            1.1      0.3
Count                           3        3
Prior                        -2.8    -11.3
Investec                     -2.9    -11.4
Nomura                        N/A    -11.5
Oxford Economics             -2.5    -10.9
Standard Chartered           -4.5      N/A
--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com
[TOPICS: MTABLE]
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com

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