Output prospects improve slightly as order books firm - CBI
UK manufacturers’ expectations for output growth have improved, while firms’ order books showed signs of recovery in June, the CBI said.
Of the 459 manufacturers responding to the latest monthly Industrial Trends Survey, 27% expect to increase their volume of output over the course of the next three months, while 19% expect it to fall. Resulting in a rounded balance of +7% marks an improvement on the negative figure recorded in May (-3%), though still below those seen in the early months of the year.
The flow of orders saw an improvement in June, with 17% reporting that order books were above normal. With 28% stating that order levels were below normal, the balance of -11% represents an upturn from last month (-17%) and is above the long-run average (-17%). Likewise, export orders also strengthened with a balance of -4%, well above the long-run average of -21%.
Expectations for output price inflation have weakened. A balance of only +2% of firms expect to increase output prices over the next quarter, the lowest balance since November 2011 (+2%).
Stock levels remain under control, with a balance of +16% saying stocks are at least adequate to meet demand, and in line with their long-run average (+14%).
Ian McCafferty, CBI Chief Economic Adviser, said:
“Despite facing continued instability within the Eurozone, UK manufacturers have seen a modest re-bound in orders from both their domestic and export markets. As a result, firms are expecting output to pick up over the next quarter, although the pace of growth is still expected to be somewhat lower than earlier in the year.”
Notes to Editors:
1. The CBI is the UK's leading business organisation, speaking for some 240,000 businesses that together employ around a third of the private sector workforce. With offices across the UK as well as representation in Brussels, Washington, Beijing and Delhi, the CBI communicates the British business voice around the world.
2. The June 2012 CBI Industrial Trends Survey was conducted between 23rd May and 13th June. 459 manufacturing firms replied.
3. Over the June survey period, the pound averaged €1.24 and $1.55 and Brent Crude $101.8 per barrel.