Comments on June Monitor
This month it is particularly important to note: The Monitor records only the number/share of companies, not the size of orders or number of jobs etc.
- Another very good month for many, particularly for companies working as subcontractors.
- Prospecting numbers remain positive with few companies reporting declines in enquiry levels.
- These numbers indicate it's reasonable to look to the second half of the year with some optimism.
- However, the good news isn't evenly spread, even though half of the companies participating are recording more orders coming in
- Many companies, across all sectors are looking to recruit.
- With over half still saying they're 'investing in all areas', there are clear signs that increased business is leading companies to invest to meet new demand and replace machines for improved performance.
- Confidence firmed this month so the Q2 average at +18 is well ahead of last year's Q2 of +4.
- These lead indicators continue to forecast a sustainable clip to business into the second half of the year.
- The Downers' share remains small, in the low teens. Half of businesses (49%) said inquiries were up this month, a third of exporters the same. Results however are unevenly distributed across the various associations.
- Overall the Q2 running averages are still well ahead of last two years:
- 2017 Q2 average balances UK +26 Export +23
- 2016 Q2 average balances UK +16 Export +10
- 2015 Q2 average balances UK +9 Export +10
- June orders also positive overall, particularly strong among subcontractors. Others areas more mixed, but still half of respondents more orders this month than last (47% for UK and 49% for export). Still a fifth or more are reporting orders down each month.
- The Q2 averages are also significantly well ahead of the last two years:
- 2017 Q2 average balances UK +15 Export +17
- 2016 Q2 average balances UK+6 Export +7
- 2015 Q2 average balances UK +2 Export +3
- The Q2 running average is now +35, double last years score (+18) and is pretty evenly spread across most participants.
Last month's big increase in the share of firms reporting "investing in all areas" was unexpectedly maintained, in part thanks to some stonking figures from companies in or close to subcontracting, who have rarely been more bullish. Results across the other sectors were more uneven.
- The Q2 running average is 49%, i.e. nearly half of all respondents are saying they or their customers are investing in all areas. Q2 2016 the average was +34%.
- Monthly balances of +6 for both working and investment capital raised the running Q2 average to +13 for working finance and +11 for investment.
- A year ago these Q2 indicators were in negative territory, -1 for working capital and -4 for investment.
- A 13-point improvement in the monthly balance to +27 brought the Q2 average up to +18 (+4 in Q2 2016)
The Monitor (Click
graphs for larger image and data)
- choice of statements in full:
- Developing projects but not committing
- Investing in all areas of the business