UK Manufacturing remains steady

manufacturing

The survey reported that total new orders edged down in the three months to April, matching the decline in the previous quarter. This was driven by a dip in export orders, whilst domestic orders were broadly flat.

Average input costs rose at the fastest pace in two years, but firms found it difficult to pass on increased costs, with both domestic and export prices continuing to fall.

Meanwhile, numbers employed in the manufacturing sector grew at a slightly stronger pace this quarter.

Firms’ outlook for the upcoming quarter is a little firmer. Both output and demand are expected to grow, with the latter underpinned by strong expectations for export orders. But despite this, optimism about export prospects for the coming year has flat-lined.

Looking to the year ahead, manufacturers’ plans for investment in buildings, and in plant & machinery are at robust levels. Stronger investment intentions were primarily driven by chemicals and food & drink manufacturers.

Rain Newton-Smith, CBI Director of Economics, said: “Manufacturing has yet to pick-up after a flat start to the year, with falling orders providing little impetus for production. While expectations for the upcoming quarter are encouraging, manufacturers are still facing sizeable external headwinds.

“The falling exchange rate should give some support to manufacturers, and investment intentions are strong. With the expected pick-up in exports, it’s likely that firms will be looking to increase capacity.

“We need to continue to help manufacturers to export their products to markets across the globe. While businesses should take the lead, Government also has a role to play through the advice provided by UKTI and our Embassies.”

Key findings were that 21 per cent of businesses reported an increase in total orders, with a quarter reporting a rise in their employment numbers.

However 19 per cent of firms said they were less optimistic about the general business situation than three months ago, and 19% less, however 24 per cent of businesses reported a rise in output volumes.

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