Drop in UK Exports A Warning To Sustained Growth

A sharp drop in export orders reported by the CBI highlights the challenge facing George Osborne, as he seeks to improve Britain’s recent poor trade record.

The latest snapshot of manufacturing from the employers’ organisation showed that while order books for industry are still growing, companies are relying on strong domestic demand.

But with a rising pound making UK goods more expensive overseas, the latest CBI monthly industrial trends survey found that 18% of firms reported export order books above normal for the time of year while 27% said they were below normal.

The rounded balance of -10 percentage points in February compares with -1 point in January, and is feeding through into lower production in factories.

More than a third of firms (36%) said output rose over the past three months against 21% recording a fall. The CBI said that while growth remained strong it was the slowest in five months and a further easing is expected over the next quarter.

Anna Leach, the CBI’s head of economic analysis, said: “The picture in the manufacturing sector remains positive. Overall, demand continues to rise and output growth is robust.

“Growth in exports is crucial to rebalancing the economy and ensuring a sustainable recovery. Over the last few surveys, manufacturing export orders have underperformed relative to overall orders as the UK’s domestic recovery has caught hold more quickly than some of our key trading partners – most particularly, the eurozone.

via The Guardian

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza