The latest measure of business confidence among global valve and actuator manufacturers shows no change compared to the previous month.
By Matjaz Matosec
New Orders — Next Month index slumps into contraction territory
Employment set to grow at the slowest pace since survey began
Cost pressures expected to increase again
The December Valve Barometer Index (VBI), a composite index combining five individual indices into one benchmark measure of business confidence, posted a reading of 50.6, just above stagnation.
Following three consecutive expansionary readings, the New Orders — Next Month index dropped into contraction territory, from 53.1 for November to 44.4 for December. This downturn is in line with seasonal demand trends and not unlikely to be short-lived, as indicated by the confidence surrounding the level of new orders in the short to medium term. Compared to the previous month, the New Orders — In 3 Months index rose by 14.5 points to a seven-month high of 58.3, while the New Orders — In 12 Months index gained 7.3 points, posting 66.7.
The growth of manufacturing production is expected to accelerate in December, with the Output index rising by 5.2 points to 58.3. By contrast, the rate of employment growth is set to slow further, with the corresponding index falling to an all-time survey low of 52.8.
The Input Prices index for December posted 61.1, bringing to an end a four-month sequence of non-expansionary readings. That inflationary pressures are mounting is also suggested by the Output Prices index, whose latest reading of 63.9 marks the third consecutive increase, fuelled by high energy and labour costs. In a more positive development, the Suppliers’ Delivery Times index ticked down to 52.8, moving closer to the no-change mark of 50.0.
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