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The CBI Warns of Post-Brexit Economic Problems

The Confederation of British Industry (CBI) has published the results of their quarterly Industrial Trends Survey, which looks ahead to the post-Brexit economy. The results are downbeat, with lower investment in manufacturing among the main issues highlighted.
If we add in the latest reports of business insolvencies and profit warnings, it could mean a more challenging post-Brexit period than had been expected.
What Did the CBI Survey Reveal About Investment?
In terms of investment, the CBI asked over 250 companies about their plans. The interviews were carried out between the 25th of September and the 14th of October. 
Among the key results, the majority of the businesses said that they will be cutting back on investment next year. In fact, investment intention was poorer than the previous quarter in 3 out of 4 of the categories. 
Plans for investment in buildings next year was reported as -44%. For plant and machinery, it was -34%. Training and retaining was -28%. All three of these areas produced their worst showing since the financial crisis. In product and process innovation, there were no big changes from the previous survey.
What Are Optimism Levels Like?
Levels of business optimism also dropped significantly from the previous quarter. This went from -32% in July to -44% in this current quarter. This is the steepest drop noted in this area since July 2016.
Another point covered was concerning business optimism around exports. This was also noted to drop sharply, from -29% in July to -46%. In this case, it is the biggest drop seen since back in October 2001. 
This helps to explain why many British businesses are cutting back on investment. It may also play a part in the recent rise in the use of international collection services to recover debts from abroad.
Drop in Output
The output section of the CBI survey also showed a worrying trend. Volumes fell from +1% in September to -10% in October. Out of the 17 sub-sectors, only 8 of them recorded an expansion in output in the quarter to October.
The biggest drops were seen in the car and transport equipment industry. Looking to the future, businesses expect that output volumes will fall even faster in the next quarter, with a -16% figure predicted.
Fewer Orders
The total number of new orders also fell in the quarter. This was given as a figure of -15%, which is similar to the rate seen in July’s report. Interestingly, domestic orders dropped at a faster rate than export orders.
The prediction for the next quarter is for new orders to drop more quickly. The quoted figure is -19%. This is based on export orders falling more steeply than domestic orders for the period.
Staff Numbers
Headcounts were down from -8% in July to -9%. This is described by the CBI as being the fastest rate reported since April 2010. 
The outlook for the upcoming quarter is for the drop to gather pace at -22%. This makes it the gloomiest headcount outlook since the financial crisis.