CBI UK Manufacturing report makes grim reading – Bank of England money printing to come in October?
The CBI we’re out today with another data point that highlights just how deep in recession the UK really is, and also signals that one of the supposed ‘benefits’ of a depreciating currency, namely that that ‘it helps our exports’, is just another in a long line of economic fallacies preached by the Bank of England.
From the report:
UK manufacturers reported a deterioration in both their total and export order books in August, while expectations for output growth have flattened, the CBI has said.
Of the 456 manufacturers responding to the latest monthly Industrial Trends Survey, 15% reported that order books were above normal, while 36% stated that order levels were below normal. The balance of -21% represents the lowest return since the end of last year (December -23%).
Similarly, export orders have weakened with manufacturers reporting a balance of -17%. While still above the long-run average of -21%, this is the lowest figure reported since January 2012 (-26%).
Prospects for manufacturers’ output growth over the course of the next three months have also softened. Output is expected to be flat over the next three months (0%), following two previous surveys in which manufacturers expected output to increase (June +7%, July +11%).
Output prices are also expected to be flat over the coming quarter for the third-consecutive month, with a balance of +1%.
Stock levels are below average, with a balance of +9% saying stocks are at least adequate to meet demand, the lowest figure since June 2011 (+3%).
Anna Leach, CBI Head of Economic Analysis, said:
“Overall demand for manufactured goods has eased back this month, led by a weakening in the consumer goods sector following a strong July figure. This sector also contributed to the weakening in output expectations for the next three months, alongside investment goods.
“The economic environment for UK manufacturers remains challenging, with domestic demand relatively muted and the ongoing Eurozone crisis now seeming to drag on broader global economic momentum.”
[emphasis ours]
So all that money printing and devaluing of the £ and still manufacturing in the UK can’t get of the ground.
What this report actually highlights is that all the money printing by the Bank of England has nothing at all to do with ‘helping’ UK manufactures. Rather, what it is really about is helping the UK government avoid bankruptcy by being the buyer of only resort of the UK’s debt. That is what ‘QE’ is really all about, and to that end with the UK government running higher than expected deficits we should all expect the money printing to continue ad infinitum.
Related posts:
- UK manufacturing PMI plunges at second fastest pace in 20 years – so will the Bank of England print next week in response?
- UK production contracts 1.7% – Bank of England to print more money early in the New Year?
- UK CPI falls to 3% – too low for the Bank of England, money printing to start within 3 months? The IMF certainly thinks so
- Bank of England’s Posen back to his money printing ‘best’ – wants the BoE to buy private assets
- BNP Paribas and JP Morgan both see the Bank of England printing more money in the next 3 months
Link to this article: : http://www.goldmadesimplenews.com/analysis/cbi-uk-manufacturing-report-makes-grim-reading-bank-of-england-money-printing-to-come-in-october-7709/
Posted by Thomas Paterson on Aug 21 2012. Filed under Analysis.
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