CBI Economic Update
UK industrial production fell 0.8% in October, well behind consensus expectations that it would grow by 0.8% after having fallen 2.1% in September. Whereas September’s fall was driven by a drop in mining & quarrying output related to maintenance shutdowns in the North Sea, October’s was driven by a 1.3% fall in the core manufacturing component – against a consensus forecast of a mild 0.2% fall. The fall in manufacturing was broad-based – ten of the thirteen main sub-sectors, accounting for 82% of total manufacturing, reported a fall in output. December’s CBI Industrial Trends Survey was a little more encouraging. Manufacturers reported that their total order books rebounded from the lows of the previous two months, and were once again a little above the long-run average. Looking ahead, firms expect output to be flat over the coming three months, an improvement from November’s survey, but still below the moderate growth anticipated back in October. Eurozone industrial production data for October were even gloomier than the UK’s. Total production fell by 1.4% in October, worse than consensus expectations of a 0.8% fall and following a sharp drop of 2.3% in September. Production is, therefore, likely to be a significant drag on GDP in the fourth quarter regardless of what happens in November and December. The fall in production was broad-based – Germany’s fell 2.4%, France’s by 0.6% and Italy’s by 1.1%. Spain reported growth of 1.2%, although that followed a severe decline of 3.1% the previous month.
Please find full article about the Economic update HERE.