Here’s a Monday morning look ahead at the data and events relating to UK manufacturing.
Trade and production
For manufacturing, neither trade nor output had a particularly strong first quarter. Looking through the monthly ups and downs in the chart below, manufacturing output was 0.1% and exports were flat.
Survey data point to more of the same in April. EEF’s Business Trends survey showed a modest softening in output balances for the second quarter and the manufacturing PMI was largely unchanged in April from March’s reading.
However, the sector breakdown will be worth a proper look. Much of the weakness in our latest survey was concentrated in the mechanical equipment and basic metals sectors – both of which saw fairly hefty contractions in the ONS data for March. Together these sectors account for just under a fifth of manufacturing output, so a continued drag on activity from falls in oil and gas investment are likely to present a somewhat subdued picture for growth overall in April.
On the export front, there is little from the surveys that would point to a pick-up in export activity in April. Our latest survey balance was flat and anecdotal feedback from members has been tilted towards slower growth in emerging markets and continuing challenges in the eurozone and Russia.
Looking across the Channel, eurozone growth is expected to be confirmed at 0.4% in the first quarter, the compositional story is likely to be similar to the UK, with households the biggest contributor, thanks to low inflation and trade and investment lagging.
EU Referendum Bill
Speaking of Europe – and we seem to be doing little else – this week will bring the second reading of the EU Referendum Bill. A key area of controversy that could be the focus of media attention will likely be whether government has a ‘purdah’ period. If not, departments will be able to publish material in support of the government’s position. The second flash point could be campaign spending limits – any change inevitably creates advantages and disadvantages. Neither of these issues is likely to have a massive bearing on business views just now, but both add yet another dimension to the debate.
Upcoming blogs from us this week…
Tues: Spending review Maths
Thurs: A postcard from our Greek Correspondent
Fri: What’s new with Catapults