United Kingdom Manufacturing Output Stalls In September: CBI

On average, manufacturers expected prices to fall in the coming three months, with the corresponding sub-index left standing at -8%. The main culprit appears to be weak external demand.

The CBI’s latest industrial trends survey shows the proportions of manufacturers reporting rises and falls in output volumes over the past three months were nearly equal, the weakest position for two years.

The stall in growth came at the same time as total orders slipped and export orders fell to their lowest level in six months.

THE woes of the United Kingdom manufacturing sector have been underlined by a survey showing export order books are in grim shape and output growth has stalled. The EconoTimes content received through this service is the intellectual property of EconoTimes or its third party suppliers.

The total orders sub-index fell to a reading of -7% (consensus: 0); although that was still higher than the long-run average of -15% it marked a decline from the -1% print seen in August.

The CBI, which conducted the industrial trends survey of 491 firms earlier this month, said the slowdown in China and the continued lacklustre growth in the eurozone, the UK’s single largest export market, had persuaded firms to freeze production.

“With the strong pound squeezing manufacturers’ margins, even though lower commodity prices are helping to ease cost pressures”, Newton-Smith said.

The CBI report added that manufacturers expect the market to remain tough with a balance of minus eight anticipating prices falling over the next three months, compared to minus six in August and a long-term average of plus one.

She said boosting export growth and innovation were “vital to improving productivity”.

Ms Newton Smith urged the Government to do more to support the manufacturing sector in the Comprehensive Spending Review and Autumn Statement on November 25.

Paul Hollingsworth, United Kingdom economist at Capital Economics, said the findings suggested the manufacturing sector performed dismally over the third quarter.