The manufacturing PMI data for April earlier reflected a good uptick in overall business activity.
The manufacturing PMI data for April earlier reflected a good uptick in overall business activity. However, it belies the underlying situation as the “better” conditions were largely driven by firms bringing forward orders.
The frontloading is mostly due to wanting to obuild safety stocks in anticipation of rising prices and supply constraints. The latest CBI data is more telling about business sentiment and things aren’t looking that great. The index for output volume expectations for the next three months sees a marked decline to -20, down from -3 in the previous report.
Meanwhile, optimism about the business situation and export prospects fell at the quickest pace since the onset of the Covid pandemic. Adding to that, output price expectations jumped up to +32 in April as compared to +12 in March. The surge higher represents the biggest one-month jump since CBI records began in 1975.