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Brexit latest: Manufacturing orders disappoint in October Brexit latest: Manufacturing orders disappoint in October
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Manufacturing orders disappointed in October, as the sharp depreciation of the pound failed to provide the overall lift for the sector that was hoped for.Manufacturing orders disappointed in October, as the sharp depreciation of the pound failed to provide the overall lift for the sector that was hoped for.
The total order book balance was -17 in the month according to the CBI’s latest survey, down from -5 in September.The total order book balance was -17 in the month according to the CBI’s latest survey, down from -5 in September.
City of London analysts had expected a slight improvement of the reading to -4.City of London analysts had expected a slight improvement of the reading to -4.
The export order balance was -6, better than the -10 reading in September.The export order balance was -6, better than the -10 reading in September.
“Manufacturers largely are treading water, as weakness in domestic demand offsets to the boost from the lower pound,” said Samuel Tombs of Capital Economics “Manufacturers largely are treading water, as weakness in domestic demand offsets the boost from the lower pound,” said Samuel Tombs of Capital Economics
Rain Newton-Smith, the CBI chief economist, said the survey showed manufacturers are optimistic about export prospects but added that the weaker pound is also feeding through to firms' costs.Rain Newton-Smith, the CBI chief economist, said the survey showed manufacturers are optimistic about export prospects but added that the weaker pound is also feeding through to firms' costs.
The balance for the past three month on unit costs was +23, up from +8 in July.The balance for the past three month on unit costs was +23, up from +8 in July.
The export prospects balance was +9, up from -11 previously. Overall business optimism improved to -8, from -47 previously.The export prospects balance was +9, up from -11 previously. Overall business optimism improved to -8, from -47 previously.
Manufacturing grew by a relatively healthy 1.6 per cent in the second quarter of 2016, contributing to just under a third of the quarter’s 0.7 per cent GDP growth. Manufacturing grew by a relatively healthy 1.6 per cent in the second quarter of 2016, contributing to just under a third of the quarter’s 0.7 per cent GDP growth.
The first estimate for GDP growth in the third quarter of 2016 - the period immediately following the EU referendum - will be releassed on Thursday.The first estimate for GDP growth in the third quarter of 2016 - the period immediately following the EU referendum - will be releassed on Thursday.
City analysts are estimating growth of around 0.3 per cent. City analysts are estimating growth of around 0.3 per cent.
According to latest ONS estimate manufacturing output fell steeply in July and recovered only partially in August.According to latest ONS estimate manufacturing output fell steeply in July and recovered only partially in August.
But the latest Purchasing Managers’ Index survey showed a sharp return to growth in September.But the latest Purchasing Managers’ Index survey showed a sharp return to growth in September.
“While there are clearly some positives in the October CBI surveys, we suspect that difficulties for the manufacturing sector will mount over the coming months,” said Howard Archer of IHS Global Insight.“While there are clearly some positives in the October CBI surveys, we suspect that difficulties for the manufacturing sector will mount over the coming months,” said Howard Archer of IHS Global Insight.
“In particular, business confidence is likely to be hampered by prolonged uncertainty, constraining investment plans and limiting demand for capital goods.”“In particular, business confidence is likely to be hampered by prolonged uncertainty, constraining investment plans and limiting demand for capital goods.”
The CBI's Industrial Trends Survey covers 459 manufacturers and was conducted between 26 September and 13 October.The CBI's Industrial Trends Survey covers 459 manufacturers and was conducted between 26 September and 13 October.
During that period the average value of sterling was €1.14 and $1.28, the CBI reported.During that period the average value of sterling was €1.14 and $1.28, the CBI reported.
The pound has slipped since and trades today at €1.12 and €1.22.The pound has slipped since and trades today at €1.12 and €1.22.