UK manufacturing output declined again in the three months to May, according to the latest monthly industrial trends survey from the CBI, extending a prolonged period of weak activity that has persisted since late 2022.
The downturn remained broad-based across the sector, with firms continuing to report subdued demand conditions and deteriorating order books.
Output volumes fell at a slightly slower pace than in the previous survey period, with a weighted balance of -23% compared with -27% in the three months to April. Despite the modest improvement, manufacturers still expect activity to contract further over the coming quarter to August, with expectations remaining firmly negative at -13%.
The weakness was widespread across industry. Output declined in 13 of the 17 manufacturing sub-sectors covered by the survey, with particularly sharp falls reported in food, drink & tobacco, mechanical engineering, metal products, and paper, printing & media. The results suggest that softer domestic and overseas demand continues to weigh heavily on production levels.
Order books deteriorated further during May. Total order books were reported as below “normal” to the greatest extent since September 2020, worsening to a balance of -41% from -38% in April. Export order books also weakened sharply, falling to -29% from -13%, leaving them significantly below the long-run average. The figures point to ongoing fragility in both UK and international demand conditions for manufactured goods.
At the same time, pricing pressures appear to be building again. Expectations for average selling price inflation rose for a second consecutive month, increasing to +38% from +32% in April — the highest reading since February 2023. The rise suggests that manufacturers continue to face cost pressures and may be seeking to rebuild margins despite subdued market conditions.
Meanwhile, stocks of finished goods were viewed as broadly adequate in May, with the balance edging up slightly to +7% from +6% in April. However, stock levels remained below their historical average, indicating that many firms are continuing to manage inventories cautiously amid uncertain demand and a weak outlook for production.
You can get the Press Release of the CBI ITS from their website at www.cbi.org.uk/media-centre (21 May) or request it from MTA.