July 23, 2014: The recovery in British manufacturing continued apace in the last quarter, with faster growth in domestic orders and output, according to the latest Confederation of British Industry (CBI) quarterly Industrial Trends Survey.

The survey of 481 firms reported robust growth in orders in the three months to July. Total order book growth edged up on last quarter’s nineteen-year high, whilst domestic orders rose at their fastest pace since 1988, although export orders were flat. Numbers employed in the manufacturing sector also continued to rise strongly.

Firms are upbeat about the next quarter, with expectations for total new orders growth at their strongest since 1977, and export orders set to rebound.

Looking to the year ahead, manufacturers’ plans for investment in product and process innovation are at their strongest since 1989, with robust plans for spending on plant & machinery, and buildings. The number of firms investing to expand capacity reached a record high (since 1979).

However, the proportion of firms concerned that political and economic conditions abroad may limit export orders rose sharply to a five-quarter high.

Katja Hall, CBI Deputy Director-General, said, “The recovery in the manufacturing sector is keeping a good pace. Industry is performing well as orders and hiring are on the up, and investment intentions for the year ahead are looking healthy across the board. It is not all plain sailing however, and there are still risks to the recovery. These include increasing international political instability, and the recent rise in sterling, which could be weighing on exports. We need to continue to help manufacturers to export their products to high-growth markets across the globe, to give a healthy and sustainable boost to the UK’s recovery.”

Key findings of three months up to July 2014:

• 41% of businesses reported an increase in total orders, and 17% a decrease, giving a balance of +24%, the highest since April 1995 (+27%)
• The balance for new domestic orders (+23%) was the highest since July 1988 (+25%), but export orders (0%) were flat, following growth in the three months to April (+16%)
• 33% of manufacturers said employment numbers were up, and 12% said they were down, giving a balance of +21%, the highest since January 1974 (+21%)
• 27% of firms said they were more optimistic about the general business situation than three months ago, and 9% less, giving a rounded balance of +19%
• 36% of businesses reported a rise in output volumes, and 13% a decrease, giving a balance of +23%
• Domestic and export price inflation was very subdued this quarter (-1% and -7% respectively), the latter at the lowest since April 2013 (-7%). Unit costs were broadly flat (+1%)
• Manufacturers’ investment intentions compared with the previous 12 months improved for product & process innovation (+32%, the highest since October 1989 (+33%) and training (+27%). They also improved for buildings (-1%, up from -6%), and intentions for plant & machinery spending remain strong (+6%)
• The number of firms saying expanding capacity would be the main reason for investment over the next 12 months rose to 51%, a survey high
• The number of firms citing political/economic conditions abroad as a constraint on export orders in the coming three months (39%) rose to its highest since April 2013 (39%).

Key findings for the next quarter:

• 42% of manufacturers expect total new orders to increase, and 8% expect them to fall, giving a rounded balance of +33%, the highest since April 1977 (+38%)
• A rounded balance of +26% expect new domestic orders to rise (38% expect an increase, and 13% a fall), and +23% expect new export orders to go up (34% expect a rise, and 11% a fall)
• 39% of businesses anticipate a rise in output volumes, and 12% a fall, giving a rounded balance of +26%.
• 24% expect employment to increase, and 13% expect it to decline, giving a balance of +11%
• At -4%, expectations for growth in domestic output price inflation are subdued. Unit costs are expected to be flat (+1%).

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19th September 2013

A new partnership among the World Bank, the European Union and the African, Caribbean and Pacific Group of States (ACP) Secretariat, along with the governments of Austria and Switzerland, convened for the first time yesterday, offering the governments of developing countries a new approach to creating jobs by strengthening private sector competitiveness.

The Competitive Industries and Innovation Program (CIIP), a five-year global program that intends to mobilize $100 million, aims to inspire broad-scale reform programs that help unlock the potential for firms and industries to compete successfully in the global marketplace. The program’s partners met today in Brussels at their first Steering Committee Meeting.

The World Bank Group and other development partners already provide valuable support to developing countries in helping strengthen private sector growth. Going beyond the traditional approach of broad policy reforms at the macroeconomic level, and beyond individual investment projects at the micro level, the CIIP turns attention to “the missing middle” by helping countries strengthen the competitiveness and innovation of specific industries.

“To ensure adequate growth, we need to create 600 million jobs over the next 15 years. Many of our client countries have been asking for new solutions to address this challenge. We set up CIIP to precisely address this issue, by encouraging informed and balanced public interventions at the industry level,” said Janamitra Devan, Vice President for Financial and Private Sector Development at the World Bank.

CIIP provides 75 percent of its resources directly to World Bank Group task teams to help developing countries pursue market opportunities through targeted, multi-year investment and policy reforms. The program will also allocate 25 percent of its resources to global knowledge generation and dissemination.

The program also defines a new way for the Bank Group in collaboration with other development partners to deliver support– for faster and better results. It involves an active dialogue and effective joint action between the private and public sector that allows policymakers to use private industries as a lens through which to optimize, sequence and motivate industrial and innovation policy reform.

“I am glad to see our partnership with the World Bank on the CIIP turning out as a truly collaborative initiative, where our financial support is complemented up by close collaboration on the ground. For our partner countries this means more relevant and better coordinated support to private sector development,” said Klaus Rudischhauser, Deputy Director General, Directorate-General for Development and Cooperation – EuropeAid, European Commission.

The CIIP partners have set ambitious and concrete development targets for the initiative. By joining forces on the ground and by working closely with the private sector, the partnership intends to focus action on clearly identified tangible results. Among the most important are:

• Growth in private investment and productivity
• Creation and growth of new firms
• Job creation and income generation

“The ACP Secretariat is pleased to collaborate with the EU and the World Bank by making 20 Million EUR of resources allocated to the ACP Group available for the CIIP,” says ACP Secretary General Mr Alhaji Muhammad Mumuni.  He continues, “We are anxious to facilitate private sector growth within the ACP Group as one of the primary mechanisms for promoting the economic development of our countries. We therefore look forward to this new partnership and to positive and tangible outcomes form this new model of intervention.”

Through strengthening competitiveness and innovation, the CIIP has the potential to leveraging up to 100 Million new jobs in beneficiary countries by the end of the program.

CIIP’s focus on competitiveness and job creation places it at the forefront of achieving the goals of ending extreme poverty and promoting inclusive and sustainable growth in developing countries. CIIP’s partnership structure allows leveraging each institution’s effort for a better impact.

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