21 March 2017

UK manufacturing has ‘strong month’

Export order books for UK manufacturers have risen to the highest level in over three years and expectations for growth are at a more than 20-year high, according to the latest CBI Industrial Trends Survey.

The survey of more than 420 firms found that export order books were at the highest level since December 2013, with a total of 24% of businesses reporting export order books to be above normal and 14% below – a balance of +10%.

Meanwhile, total order books remained firm in March, with a quarter of businesses reporting total order books to be above normal and 16% saying orders were below normal – a rounded balance of +8%.

Output growth also rose at its quickest pace since July 2014 in the three months to March, with 39% of businesses reporting a rise in output volumes, and 17% a fall, giving a rounded balance of +23%.

Additional findings from the survey show that output growth is expected to grow faster over the next three months, average output prices are expected to increase over the next quarter once again, and some businesses reported stocks as more than adequate to meet expected demand.

Anna Leach, CBI head of economic intelligence, said: “It’s been a strong month for UK manufacturers, with production growing robustly and overseas demand on the up. The past fall in the pound seems finally to be helping lift demand for UK manufactured exports, which rose at one of the fastest paces in this survey’s history. And manufacturers are positive about the quarter ahead, expecting output to grow at the fastest rate since February 1995.

“But the flipside is that cost pressures are widespread, and manufacturers expect factory-gate prices to continue to rise strongly over the next three months. And this will also put pressure on prices generally.”

Pete Baxter, vice president of digital manufacturing at Autodesk, said that a rise in export order books and expectations for growth “is promising for the UK manufacturing”.

"To keep building on this momentum the industry needs to invest in the right skills to work with new and advanced technologies. This will be an interesting year for UK manufacturing. Remaining competitive on the global stage will be more important than ever,” he said.

Adam Offord | @AdamOfford

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