Comments on January Monitor Data
The Monitor records only the number/share of companies, not the size of orders or number of jobs etc. Comparisons are with the previous month.
- UK and export enquiry numbers, both for the month and for the three-month running balances are the most positive they have been for some considerable time. The question is whether these improvements will be maintained.
- UK order balances for the month also vastly improved with nearly two in ten saying that UK orders are up. The downside is that between a quarter and a third are still reporting orders down, so the big improvements in the three-month running order balances are likely to fall back in the coming months.
- Job balances (positive) and finance (negative) have changed little..
- Investment activity has slipped a bit, albeit over a third are still reporting investment in all areas of the business.
- Confidence balance now neutral, so little or no real change since last time.
- There were more firms reporting increases in UK (up 5 points) and export (up 9 points) enquiries so that January saw the highest proportion of firms reporting gains in this area since September 2014 (for UK prospects) and April 2014 (for exports).
- These improvements were complemented by useful declines in the number of companies saying that enquiries were down (14 points on UK business and 13 points on overseas business).
- All this produced the healthiest monthly balances since September 2014 and has a radical effect on the running three-month balances:
- 2016 January 3-month running average balances UK +11 Export +7
- 2015 January 3-month running average balances UK +2 Export 0
- Monthly UK order balance in January surged to +27 from +6 thanks to a walloping increase in the share of firms reporting order gains (up to 52% from 33% last time). This improvement came at the expense of firms reporting business levels unchanged (40% last time 23% this).
- The monthly export balance remained unchanged negative (-4, -5 last time).
- The downside to these numbers is in the large proportion of firms still reporting orders down on a monthly basis as the numbers are ‘unchanged’ since the last time.
- Comparing the 3-month running average balances shows UK business well ahead of last year’s performance , with exports unchanged.
- 2016 January 3-month running average balances UK +12 Export -2
- 2015 January 3-month running average balances UK +2 Export -3
- The January balance remained in positive territory reflecting expectations about creating jobs.
- Basically after an aberrant October return on jobs, things have changed little since last summer.
- Over a third of firm are reporting investment in all areas, which is positive.
- There are still more companies undertaking some form of investment but the centre of gravity seems to have moved marginally towards the ‘not investing’ group.
- No change but negative undertow
- Balance 0 shows little or no change in confidence, which appears to be constrained.