Reassurance likely on the UK's output trend

The big fall in the April manufacturing PMI of UK from 54.0 to 51.9 has caused the market to become a little gloomy about the prospects for the manufacturing sector. That concern was also fed by the surprisingly weak Q1 GDP number. 

However, the underlying drivers of demand are strong and indeed strengthening, expects Societe Generale. The election campaign may have caused some jitters but overall the orders and output expectations in the CBI survey is likely to have held up well. In the details, output expectations look a little high compared to trend so should fall a little whereas orders could rise slightly.