Comments on July 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.
- Over the summer (July and August) the Monitor's returns often reflect big changes as some firms shut down for a vacation period, while other run their business on a skeleton roster.
- So during these two months it's important to compare the results with previous years, especially on the running averages.
- Without exception, this year's running averages for the three months up to and including July are better than the last two years. Mostly markedly so.
- What is quite exciting is that according to these returns, enquiry levels remain strong, not just as running averages, but also on the straightforward month-on-month comparisons.
- Yet again the good news isn't evenly spread. The core manufacturing machinery makers aren't having as good a time of it as the subcontractors or those supplying into sectors that ultimately serve consumers.
- Nearly 40% of companies say they are developing projects, but not investing at the moment.
- These lead indicators continue well ahead of previous years on three-month running averages as well as on a single monthly basis.
- Interestingly the Downers' share remains small for exporters, but has doubled on UK business.
- Overall the three-month running averages compared with the last two years are:
- 2017 average balances UK +23 Export +25
- 2016 average balances UK +0 Export +5
- 2015 average balances UK +14 Export +14
- JAs expected July order numbers are much lighter, with UK business just remaining in positive territory while exporters' balances turn negative.
- Yet again, performances across different subsectors vary considerably with mainstream machinery manufacturers reporting bigger reductions than contractor sectors and those supplying into consumer related customers.
- Nonetheless business over the three-month running averages remains very positive and well ahead of 2016 and '15
- 2017 average balances UK +18 Export +18
- 2016 average balances UK -3 Export -5
- 2015 average balances UK +9 Export +4
- Similarly this running average is now +30, more than double last year's score (+13) and is pretty evenly spread across most participants.
The share of companies reporting "investing in all areas" falls back again but still represents over a third of all companies reporting, while yet again the three-month running average is 49% well ahead of last year's 26% and just ahead of 2015's strong average of 45%.
- It is worth noting that almost two in five firms (38%) say that they are developing projects but not committing to them, reflecting how current uncertainties are playing on some companies' plans.
- There's a small weakening on the access to finance numbers, basically indicating no change.
- This month's numbers are down a little, again basically reflecting no change, with the three-month running average (+19) compared with last year (-5).
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