Solid outlook for UK manufacturers
Activity in the manufacturing sector remained steady in December and production is expected to continue rising in the next three months, according to the latest CBI Industrial Trends Survey.
Output growth has been broadly steady since August, and has remained above average this month. Amongst the various sectors, growth in Motor Vehicles & Transport Equipment rose to a nine-month high.
The survey of 485 manufacturers found that total order books edged up slightly, remaining strongly above average. Whilst still relatively weak, export order books improved slightly and are at a four-month high.
Other key findings include:
- 32% of firms said the volume of output over the last three months was up and 19% said it was down, giving a balance of +13%. This was above the historical average (+2%)
- Businesses expect output to grow in the coming quarter, with 31% predicting growth, and 15% a decline, giving a balance of +16%
- 25% of firms reported total order books were above normal, and 19% said they were below normal, giving a rounded balance of +5%. This was well above the long-run average (-16%)
- 16% of businesses said their export order books were above normal, and 29% said they were below normal, giving a balance of -13%. Whilst still weak, this was above average (-20%)
- Output price inflation expectations for the next quarter rose to their highest (+7%) since April 2014 (+9%)
Commenting on the findings, Rain Newton-Smith, CBI director of economics, says: “With Eurozone growth disappointing and some emerging markets facing a tough time, firms need to look harder for opportunities to ramp up exports to high-growth sectors across the globe.”