UPDATE: MNI UK Data Forecasts - Oct IOP, Trade

By Jamie Satchithanantham

     LONDON (MNI) - UK short-term production indicators will be published Dec 8,

giving an early indication as to how the final quarter of the year started, with

analysts expecting a modest pick-up.

     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 0.1% m/m in October, extending the view that the sector is

in reasonable 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 in this 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                     0.1         3.5            0.1            3.8

Forecast High              0.4         3.9            0.3            4.1

Forecast Low                 0           2              0              3

Count                       11           8              8              7

Prior                      0.7         2.5            0.7            2.7

Capital Economics          0.1         3.5            0.0            3.8

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

JP Morgan                  0.2         3.7            0.1            3.9

Lloyds TSB                 0.0         3.5           -0.2            3.6

Natixis                   -0.2         3.3           -0.4            3.4

Nomura                     0.0         3.5            0.0            3.8

Oxford Economics           0.4         3.9            0.3            4.1

Pantheon                  -0.3         N/A            N/A            N/A

Scotia                     0.1         N/A            0.1            N/A

Standard Chartered         N/A         2.3            N/A            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 a touch higher at

stg3.0bn. The trade in goods deficit is expected broadly unchanged at stg11.4bn.

------------------------------------------

                              Oct      Oct

                            Total  Visible

                    Trade balance    Trade

                           stg bn   stg bn

Date Out                   08-Dec   08-Dec

Median                       -3.0    -11.4

Forecast High                -2.5    -10.9

Forecast Low                   -5      -12

Count                           6        5

Prior                        -2.8    -11.3

Capital Economics            -3.0    -11.5

Investec                     -2.9    -11.4

Lloyds TSB                   -2.9    -11.0

Nomura                        N/A    -11.5

Oxford Economics             -2.5    -10.9

Pantheon                     -3.5      N/A

Standard Chartered           -4.5      N/A

--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

[TOPICS: MABDT$,M$B$$$,M$E$$$]