The latest CBI Industrial Trends Survey points to a clear improvement in UK manufacturing order books in August, although output remains under pressure. Total order books were reported as below normal to the smallest extent since November 2024, while export order books recovered to normal for the first time since June 2022. The survey, conducted between 27 July and 13 August, received responses from 273 manufacturers.
Manufacturing output volumes fell in the three months to August, but the decline slowed compared with July. Output decreased in 12 of the 17 subsectors, with the largest falls reported in metal products, food, drink & tobacco, chemicals and electronic engineering. Manufacturers expect output to decline again over the three months to November, although expectations are considerably less negative than in recent months.
Total order books improved significantly, with the balance rising from -45% in July to -25% in August, its least-negative reading since November 2024, although order books remain below their long-run average. Export order books showed a more marked improvement, moving from -33% to 0%, indicating that they were judged to be at normal levels for the first time in more than four years and well above their long-run average.
Cost and pricing pressures remain a concern. Manufacturers’ expectations for average selling price inflation strengthened in August, with the balance rising to +22%, well above its long-run average of +8%. Stocks of finished goods remained broadly adequate, with the balance easing slightly from July but remaining above its long-run average.
Overall, the survey provides some encouraging signs for UK manufacturing, particularly the significant improvement in domestic and export order books. However, continued declines in output and elevated selling-price expectations suggest that trading conditions remain challenging, with a sustained recovery in manufacturing activity yet to be established.
You can get the Press Release of the CBI Industrial Trends Survey from their website at http://www.cbi.org.uk/media-centre (20 August) or request it from MTA.