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Brexit latest: Manufacturing orders disappoint in October

The total order book balance was -17 in the month according to the CBI's latest survey, down from -5 in September

Economics Editor

Monday 24 October 2016 16:17 BST

The falling pound has helped UK manufacturers (Getty)

Manufacturing orders disappointed in October, as the sharp depreciation of the pound failed to provide the overall lift for the sector that was hoped for.

The total order book balance was -17 in the month according to the CBI’s latest survey, down from -5 in September.

City of London analysts had expected a slight improvement of the reading to -4.

The export order balance was -6, better than the -10 reading in September.

CBI

“Manufacturers largely are treading water, as weakness in domestic demand offsets the boost from the lower pound,” said Samuel Tombs of Capital Economics

Rain Newton-Smith, the CBI chief economist, said the survey showed manufacturers are optimistic about export prospects but added that the weaker pound is also feeding through to firms' costs.

The balance for the past three month on unit costs was +23, up from +8 in July.

The export prospects balance was +9, up from -11 previously. Overall business optimism improved to -8, from -47 previously.

Manufacturing grew by a relatively healthy 1.6 per cent in the second quarter of 2016, contributing to just under a third of the quarter’s 0.7 per cent GDP growth.

The first estimate for GDP growth in the third quarter of 2016 - the period immediately following the EU referendum - will be releassed on Thursday.

City analysts are estimating growth of around 0.3 per cent.

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Chancellor of the Exchequer Philip Hammond

The Chancellor claims London can still be a world financial hub despite Brexit “One of Britain’s great strengths is the ability to offer and aggregate all of the services the global financial services industry needs” “This has not changed as a result of the EU referendum and I will do everything I can to ensure the City of London retains its position as the world’s leading international financial centre.”

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Yanis Varoufakis

Greece's former finance minister compared the UK relations with the EU bloc with a well-known song by the Eagles: “You can check out any time you like, as the Hotel California song says, but you can't really leave. The proof is Theresa May has not even dared to trigger Article 50. It's like Harrison Ford going into Indiana Jones' castle and the path behind him fragmenting. You can get in, but getting out is not at all clear”

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Michael O’Leary

Ryanair boss says UK will be ‘screwed’ by EU in Brexit trade deals: “I have no faith in the politicians in London going on about how ‘the world will want to trade with us’. The world will want to screw you – that's what happens in trade talks,” he said. “They have no interest in giving the UK a deal on trade”

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Tim Martin

JD Wetherspoon's chairman has said claims that the UK would see serious economic consequences from a Brexit vote were "lurid" and wrong: “We were told it would be Armageddon from the OECD, from the IMF, David Cameron, the chancellor and President Obama who were predicting locusts in the fields and tidal waves in the North Sea"

PA

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Mark Carney

Governor of Bank of England is 'serene' about Bank of England's Brexit stance: “I am absolutely serene about the … judgments made both by the MPC and the FPC”

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Christine Lagarde

IMF chief urges quick Brexit to reduce economic uncertainty: “We want to see clarity sooner rather than later because we think that a lack of clarity feeds uncertainty, which itself undermines investment appetites and decision making”

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Inga Beale

Lloyd’s chief executive says Brexit is a major issue: "Clearly the UK's referendum on its EU membership is a major issue for us to deal with and we are now focusing our attention on having in place the plans that will ensure Lloyd's continues trading across Europe”

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Colm Kelleher

President of US bank Morgan Stanley says City of London ‘will suffer’ as result of the EU referendum: “I do believe, and I said prior to the referendum, that the City of London will suffer as result of Brexit. The issue is how much”

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Richard Branson

Virgin founder believes we've lost a THIRD of our value because of Brexit and cancelled a deal worth 3,000 jobs: We're not any worse than anybody else, but I suspect we've lost a third of our value which is dreadful for people in the workplace.' He continued: "We were about to do a very big deal, we cancelled that deal, that would have involved 3,000 jobs, and that’s happening all over the country"

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Barack Obama

US President believes Britain was wrong to vote to leave the EU: "It is absolutely true that I believed pre-Brexit vote and continue to believe post-Brexit vote that the world benefited enormously from the United Kingdom's participation in the EU. We are fully supportive of a process that is as little disruptive as possible so that people around the world can continue to benefit from economic growth"

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Kristin Forbes

American economist and an external member of the Monetary Policy Committee of the Bank of England argues that the economy had been “less stormy than many expected” following the shock referendum result: “For now…the economy is experiencing some chop, but no tsunami. The adverse winds could quickly pick up – and merit a stronger policy response. But recently they have shifted to a more favourable direction”

Getty

According to latest ONS estimate manufacturing output fell steeply in July and recovered only partially in August.

But the latest Purchasing Managers’ Index survey showed a sharp return to growth in September.

“While there are clearly some positives in the October CBI surveys, we suspect that difficulties for the manufacturing sector will mount over the coming months,” said Howard Archer of IHS Global Insight.

“In particular, business confidence is likely to be hampered by prolonged uncertainty, constraining investment plans and limiting demand for capital goods.”

The CBI's Industrial Trends Survey covers 459 manufacturers and was conducted between 26 September and 13 October.

During that period the average value of sterling was €1.14 and $1.28, the CBI reported.

The pound has slipped since and trades today at €1.12 and €1.22.

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