CBI Industrial Trends Survey, May* 2024: The latest edition of the CBI Industrial Trends Survey (ITS) – dated May* – showed the first increase in manufacturing output volumes in 18 months, although there was an interesting contrast with order books which were at their weakest since last November.
While output was positive overall, it only increased in 8 of the 17 sub-sectors covered by the ITS in the 3 months to May*; the three sectors generating the largest uplift in output were chemicals, food & drink and automotive & other transport equipment. Output is expected to increase further in the coming three months, albeit only at a modest pace.
In contrast, total order books slipped back, recording the weakest balance since last November and extending the below average run to 10 months. Export order books also deteriorated compared to the previous survey and at a below-average pace; however, it was slightly above the March* figure.
Stocks of finished goods improved to a level slightly above the long-run average and the highest since the January* survey – the net balance of firms saying that stocks were “more than adequate” reached +14.
- Note that although this survey is dated May, the data collection took place between 25th April and 13th May so the results really cover the 3-month periods from February to April (past) and May to July (future). A similar principle applies to the other months mentioned in this report.
You can get the Press Release of the CBI ITS from their website at www.cbi.org.uk/media-centre (21 May) or request it from MTA (we can also provide a summary of the results).
UK Productivity, 1st Quarter 2024: The Office for National Statistics recently published flash estimate of productivity for the UK economy which showed output per hour worked (the preferred measure of productivity) was +0.1% higher than in the 1st period of 2023. This increase came because gross value added (the proxy for output) increased slightly faster than the number of hours worked.
Output per hour was 1.7% above its pre-pandemic level (measured as the average for 2019 for this series) thanks to output increasing (+2.0%) more rapidly than hours worked (+0.3%).
These figures are for the whole economy and we don’t yet have the industry breakdown for the 1st quarter of 2024, although the ONS has now released this breakdown for the 4th quarter of 2023 (and, therefore, the full year). This is significant because manufacturing made the largest contribution to the improvement in productivity in the whole economy.
For the 4th quarter of 2023, output per hour worked in manufacturing was +4.0% higher than a year earlier and +9.1% above the pre-pandemic level. In both cases this was because gross value added had increased while the number of hours worked was lower.
For 2023 as a whole, output per hour worked was +2.8% higher than in 2022 and +8.9% above the 2019 level; again, in both cases this is because output increased while hours worked fell.
You can download the ONS Statistical Bulletin on productivity from their website at https://www.ons.gov.uk/releasecalendar (14 May) or request if from MTA.