Moderate boost to output prospects as order books improve
UK manufacturers expect modest growth in output in the coming three months, while order books improved compared to the disappointing figures from August, the CBI said.
Of the 425 manufacturers responding to the latest monthly Industrial Trends Survey, 28% expect to increase their volume of output over the course of the next three months, while 21% expect it to fall. The resulting balance of +7% is in line with the long-run average (+6%) and follows the expectation last month of a flat period for output (0%).
Total order books saw an improvement from August (balance of -21%), with 19% of firms reporting them as above normal and 28% stating that order levels were below normal this month. The rounded balance of -8% is also well above the long-run average (-17%) and back in line with July’s results (-6%). Likewise, export orders also recovered with a balance of -10%, comfortably above the long-run average of -21%.
Stock levels rose to their highest level since October 2011 (+21%), with a balance of +18% stating that stocks are at least adequate to meet demand, a little above the long-run average (+14%).
Anna Leach, CBI Head of Economic Analysis, said:
“Domestic and overseas demand have improved in this survey following last month’s falls, providing a foundation for somewhat better output growth expectations. Manufacturers believe that there will be a modest rise in output over the coming months, driven largely by the chemicals and food and drink sectors.
“But uncertainty is expected to build through the autumn – with key decisions to be made in the Eurozone and the approach of the US fiscal cliff – meaning that conditions are likely to remain difficult for UK manufacturers.”