What are this week's key data releases for UK manufacturing?
Production and trade data are out on Tuesday
On Tuesday, we will get the industrial production and manufacturing data for June. After its upward slope in April (+2.2% m/m) and contraction in May (-0.6% m/m), we expect industrial production to stagnate in June. This would be consistent with the ONS preliminary estimate of GDP for the second quarter, where the quarterly growth in industrial production came at 2.1% in Q2 2016. Manufacturing could contract slightly, mainly driven by a pull-back after its 10-year record high in April.
Also on Tuesday, the ONS will release data for UK trade. We think exports in goods should accelerate in June, consistent with the positive contribution of net trade to Q2 GDP. Again, data for June are unlikely to reflect any impact on UK trade as it preceded the EU referendum. Looking forward, manufacturers have seen unchanged immediate trading conditions according to our EU referendum survey released in July. However, they expect EU demand conditions to weaken considerably in the next six months while the outlook is better for non-EU orders, suggesting an overall mixed impact on export orders in 2016.
Euro-area GDP to be released on Friday
Eurostat will release its final estimate of Euro area GDP for the second quarter of this year. The preliminary estimate showed growth at 0.3 per cent, slowing from 0.6 per cent in the first quarter. The slowdown is thought to be driven by domestic demand, which could weigh on UK exports.