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Business Monitor for September 2017
(89 responses, 58% exporters)

Comments on September Monitor Data

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.

Summary

  • 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.

Statistical commentary

Enquiries:

  • 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).

Orders:

  • 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.

Jobs:

  • Job opportunities remain plentiful with the monthly balance around +30.

Investment:

  • 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:

  • 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)


Notes:

  • choice of statements in full:
    1. Developing projects but not committing to them
    2. Investing in all areas of the business

 

Access to Finance

Monthly Changes in Confidence