U.K. manufacturing sector seems to be weakening, says Societe Generale

U.K. manufacturing sector is likely weakening slightly. The state of the sector is becoming quite difficult to read. The survey data indicated to continuing growth in October, whereas the out-turn was a decline of 0.9 percent in sequential terms. The CBI Industrial Trends survey for November indicated past output on a weakening trend but anticipated very strong output. The latter is expected to begin weakening, said Societe Generale in a research report.

The background conditions imply that export orders are likely to have rebounded as the impact of a weaker pound is felt. The flipside of the currency weakness is a rise in costs that is already manifesting itself in increased output prices. These two impacts are likely to be seen in the December survey, added Societe Generale.