ECONOMY TOP EXPORT MARKETS, SOUTH E AST Rank
Market
Weight
Output Index,
Oct ‘21
1 USA
16.4% 57.6
2
Germany
12.0%
52.0
3
Netherlands
6.3%
58.0
4
France
6.1%
54.7
5
Ireland
6.0%
62.5
❛❛ The Export Climate Index
rose from 55.0 in September to 55.1 in October, signalling another marked rate of growth ❜❜
Sources: Natwest, IHS Markit
E X P O R T C L I M AT E I N D E X
EXPORT CONDITIONS IMPROVE SHARPLY IN OCTOBER
sa, >50=growth since previous month
The South East Export Climate Index is calculated by weighting together national PMI output data according to their importance to the manufacturing exports of the South East. This produces an indicator for the economic health of the region’s export markets.
70 60 50
The Export Climate Index rose from 55.0 in September to 55.1 in October, signalling another marked rate of growth.
40
Expansions were seen across all five of the key export markets with Ireland recording the strongest uptick, and for the fourth month running. Netherlands and the US saw rates of expansion in output accelerate, while growth in France slowed, but was still solid overall. Germany meanwhile registered only a modest upturn, which was the softest since February.
20
30
10 07
08 09
10
11
12
13
14
15
16
17
18
19
20
21
Sources: Natwest, IHS Markit
UK SECTOR FOCUS: FOOD & DRINK
INPUT PRICES INDE X
sa, >50=growth since previous month
The UK’s Food & Drink manufacturers recorded a sustained strong upturn in new orders in the three months to October, following near-record growth in order books in the second quarter. Key to this was stronger domestic demand, with new export orders falling slightly over the period.
85 80 75 70
However, data pointed to an unprecedented build-up of backlogs across the sector as inflows of new work rose at a far quicker rate than production levels, which were constrained by a combination of staff shortages and supply bottlenecks.
65 60 55 50 45 40 07
08 09
10
11
12
13
14
15
16
17
18
19
20
21
Sources: Natwest, IHS Markit
INPUT PRICE INFLATION ACCELERATES TO RECORD RATE
South East companies continued to report historically elevated rates of input price inflation during October. In fact, the rate of increase accelerated to a fresh series high. Firms mentioned that higher costs stemmed from raw material scarcity, Brexit, supply-chain issues as well as higher fuel, energy, and staff costs. The overall rate of inflation was substantial and well above July’s previous peak. Sector data revealed manufacturers noted a quicker increase in input prices than service providers.
Employment fell slightly in the three months to October owing to difficulties retaining and recruiting staff, while lead times on inputs lengthened to the greatest extent on record. The tightness in supply chains was further reflected in a near-record increase in input costs. In turn, this pushed output price inflation to an all-time high.
31
