UK manufacturing output growth robust but prices set to rise

Manufacturing orders are on the rise but export orders and output growth have eased in November, according to the latest monthly Industrial Trends Survey from the CBI.

Manufacturing orders on the rise in the UK CBI survey
Manufacturing orders are on the rise according to the latest monthly Industrial Trends Survey from the Confederation of British Industry (CBI)The survey of 430 manufacturers found that total order books returned to levels seen throughout the summer, and well above the long-run average. Meanwhile, export orders dipped a little, but remained above average.Output volumes rose at a slower pace over the past three months. Expectations for production over the coming quarter are robust, however, reaching their highest level since February 2015.In the wake of sterling’s sharp depreciation, manufacturers expect to increase average selling prices over the next three months, at the fastest pace since January 2014. Three quarters of the rise in the balance comes from the food and drink sector, with price hikes for popular household commodities.

CBI Annual Conference 2016:


Rain Newton-Smith CBI chief economist said, "It’s good to see manufacturers’ overall order books at healthy levels, and the outlook for output growth remaining robust as we head into Christmas."But the weak pound is beginning to make its mark, and prices are expected to rise, especially in the food and drink sector. On the flip side though, export orders remain above average."To bolster British industry, manufacturers want to see bold decisions in the Autumn Statement. A crystal clear focus is needed on infrastructure, investment and innovation from the Chancellor, so that firms are given the very best environment in which to grow, both at home and abroad."

Key findings:

  • 23 per cent of manufacturers reported total order books to be above normal, and 26 per cent said they were below normal, giving a balance of -3 per cent. This was above average (-15 per cent), and similar to the balance seen through the summer
  • 16 per cent of firms said their export order books were above normal, and 27 per cent said they were below normal, giving a balance of -11 per cent. November’s level dropped on the previous month (-6 per cent), but remained well above average (-19 per cent)
  • 28 per cent of businesses said the volume of output over the past three months was up, and 24 per cent said it was down, giving a balance of +4 per cent
  • Manufacturers expect output to grow robustly in the coming quarter, with 38 per cent predicting growth, and 15 per cent a decline, giving a rounded balance of +24 per cent. This is the highest since February 2015 (+25 per cent)
  • Average selling prices are expected to rise sharply over the next three months (+19 per cent), and at their fastest pace since January 2014 (+20 per cent)
  • 12 per cent of firms said their present stocks of finished goods are more than adequate, whilst 10% said they were less adequate, giving a rounded balance of +3 per cent. This was the lowest since July 2015 (+3 per cent).

For related news and features, visit our Enterprise section.

Access hundreds of global services and suppliers in our Online Directory

 

now to our Global Mobility Toolkit