Comments on September 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.
- Have to observe the Monitor remains amongst the more bullish business surveys.
- September returns are encouraging and complete a positive set of stats for Q3.
- Enquiries and prospecting remain strongly positive and have now been on a continuous positive monthly run for over a year for UK business and nearly two years for exporters.
- The trend converting prospects into orders isn't as strong and is more erratic amongst exporters than for domestic business.
- Recent announcements on pausing investment and decisions on supply chains may explain this.
- They certainly seem to explain the variance between different subsectors (e.g. automotive and oil & gas supply chains.
- Employers still have plenty of job vacancies to fill, but there's not much statistical evidence in the Monitor for a big push in investing in staff development and training.
- Confidence continues to firm slightly, maintaining its positive trend since late summer 2016.
- These lead indicators remain positive and are ahead of the last two years:
- 2017 Q3 monthly average balances UK +11 Export +20
- 2016 Q3 monthly average balances UK +9 Export +9
- 2015 Q3 monthly average balances UK +5 Export +12
- They have been on a continuous, positive monthly trend for over a year for UK business (since August 2016) and for nearly two years on exports (last negative in November 2015).
- Both UK and exporter orders are positive this month, with good growth in the share of firms reporting increases (+11 for UK and +14 for exports).
- Export balances also improved thanks to a 17 point cut in the 'downers' share producing a 31 point turnaround on exports and a 13 point gain over August for UK business.
- 2017 Q3 monthly average balances UK +7 Export +3
- 2016 Q3 monthly average balances UK +4 Export +5
- 2015 Q3 monthly average balances UK -1 Export -7
- This positive performance isn't strong enough to conclude that the underlying base demand reflected in the enquiry stats is being regularly converted into orders.
- Recent reports of OEM investment freezes and pausing decisions on supply chain contracts may account for this. Certainly such actions may explain why results vary across subsectors.
- Job opportunities remain plentiful with the monthly balance around +30.
A 20 point increase in firms reporting 'investing in all areas' to 56% of participants takes the monthly Monitor back to the levels seen at the end of Q2.
- Still not seeing a strong commitment to skills and training being maintained when firms are having to cut back, with Q3 averaging 10% of companies saying they are 'investing in staff development and training, not capital investment' compared with 29% in Q3 2016, when the capital investment numbers were much lower than this year (Q3 2017 = 43; Q3 2016 = 21)
Access to Finance:
- Access to finance slightly improved or unchanged.
- Confidence has run positive for over 12 months (since August 2016).
- The current balances have been on a strengthening trend, so that the Q3 average this year at +22 is better than double the Q3 2016 level (+9)
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