The latest monthly data and results of the most recent quarterly survey of industrial trends were released today by the CBI (Confederation of British Industries). Britain's manufacturing sector has been depressed for some time, as evidence by the first chart showing the monthly percent balances of increases less decreases in new orders. Rarely have increases in orders outweighed decreases and then only by a very small margin.

There is little comfort in the monthly data for the sector. The percent balance of decreases over increases in new orders in April of 24% is the largest since November, 2003.

Nor is the survey encouraging. While the survey revealed that the respondents were slightly less pessimistic in the current quarter compared to the first quarter, they were generally more pessimistic concerning the current status and outlook for new orders, output, prices and unit costs. The percent balances for new orders and output over the past three months are shown in the second chart.

Although the manufacturing share of gross value added has declined from 24% in 1985 to 16% in 2004, a slowdown in manufacturing activity should have a significant impact on growth of the total economy.