Trends

The diagrams demonstrate some of the consequences of the strong pound for manufacturing, and show that despite widespread concern the statistics are not yet clear cut. On the up side, price indices for general inputs and selected raw materials produced by the Office for National Statistics show consistent falls in price. Input prices were down […]

The diagrams demonstrate some of the consequences of the strong pound for manufacturing, and show that despite widespread concern the statistics are not yet clear cut.

On the up side, price indices for general inputs and selected raw materials produced by the Office for National Statistics show consistent falls in price. Input prices were down 6.4% in July compared with last year.

But data for output prices suggests that UK goods might not be as expensive for the export market as has been mooted. However, two caveats must be added.

The ONS data in the tables excludes perishable goods such as food and beverages. Factor these in, and output prices are estimated to have risen by 1.4% over 12 months to July 1997, compared to only 0.2% without them.

This could suggest that similar increases for other sectors are waiting.

Second, there is the disturbing news on new orders in July’s data from the Chartered Institute of Purchasing and Supply.

The indices – using 50 as a median no change point – reported that orders slipped from 52.4 (a small increase) in June to 46.1 (a sharp decline).

The Purchasing Managers Index was reasonably stable, although a significant fall is expected for August.