The latest CBI Industrial Trends Survey shows UK manufacturing output contracted in the three months to September, albeit at a slower pace than previously. Output registered a balance of -13%, an improvement on -22% in August. However, manufacturers expect a further decline in the coming quarter, with forecasts for the three months to December indicating a further fall, at -14%.
The survey, based on responses from 290 manufacturers, reflects the high costs, policy uncertainty, and labour shortages faced by manufacturers, constraining growth and investment, with weak demand and difficult conditions expected to persist.
The downturn in output was broad-based, with 13 of 17 sub-sectors reporting declines. The chemicals, metal products, and mechanical engineering sub-sectors were the principal drivers of the contraction.
Order books remained under pressure in September. Total order books were assessed as below “normal” at -27%, an improvement from -33% in August but still substantially weaker than the long-run average of -14%. Export order books recorded a balance of -32%, unchanged from August and significantly below their long-run average of -19%.
Stocks of finished goods were reported as more than adequate, with a balance of +12% in September, up from +7% in August and in line with the historical average.
You can get the Press Release of the CBI ITS from their website at www.cbi.org.uk/media-centre (23 September) or request it from MTA; we can also provide a summary of the results.