Manufacturing growth remaining broadly steady: CBI
23 March 2015
Activity in the UK's manufacturing sector remained broadly steady in March, according to the CBI’s latest Industrial Trends Survey, released today.
Raine Newton-Smith
Output has been growing at a decent pace since last August, and despite easing slightly from the previous month, remained above average in March. Manufacturers expect to ramp up production even further in the next three months, just short of February’s robust prediction.
The survey of 468 manufacturers found that total order books climbed down a little from February’s six month high, but remained well above average, with fifteen of the survey’s eighteen sub-sectors reporting stronger than average orders. Export orders weakened significantly from February’s half year high, falling below their long-run average.
“Our manufacturers lost some of their steam from last month, but they continue to move steadily along a decent growth track," says Raine Newton-Smith, the CBI's director of economics (pictured). “Sluggish export performance seems to be a headache that won’t go away, with a still subdued Eurozone and headwinds from a stronger pound. But measures in the Budget to support exporters should be a welcome boost for the sector’s longer-term prospects. With emerging markets facing a tough time and uncertainty continuing to hang over the Eurozone, firms are having to work even harder for opportunities to sell their products and services around the world.”
Key findings:
- 32 percent of firms said the volume of output over the past three months was up and 22 percent said it was down, giving a rounded balance of +11 percent. This was above the historical average (+3 percent)
- Businesses expect output to grow in the coming quarter, with 34 percent predicting growth, and 12 percent a decline, giving a balance of +22 percent. This edged down on February’s expectation (+25 percent), but remained well above the long-run average (+7 percent)
- 22 percent of firms reported total order books were above normal, and 22 percent said they were below normal, giving a balance of 0 percent, well above the average (-16 percent)
- 10 percent of businesses said their export order books were above normal, and 35 percent said they were below normal, giving a rounded balance of -26 percent. This was a bit below the average (-20 percent)
- Output price inflation expectations for the next quarter eased (+4 percent) on February’s ten month high (+8 percent)
- 17 percent of firms said their present stocks of finished goods were more than adequate, and 5 percent reported they were less than adequate, giving a rounded balance of +13 percent.
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