Strong growth in manufacturing sector
Manufacturing order books remained robust and output growth accelerated in February, according to the latest CBI Industrial Trends Survey.
The survey of 380 manufacturers found that total order books improved slightly on January, although they remained below levels recorded in November and December. Overall export orders also rebounded after a drop in January. The motor vehicles sector was the biggest contributor to the improvement in export orders, recording its strongest performance since October 2011.
Output grew at one of the strongest rates since survey records began in 1975. Optimism about output prospects also improved, with expectations for output growth over the coming three months at their strongest since September - 16 out of 17 sectors expect output to expand over the next three months.
Anna Leach, CBI Head of Economic Analysis, said:
“The manufacturing sector shows continued signs of improvement with demand high and steady and output growing strongly.
“Growth is increasingly broad-based and firms’ growth expectations are the highest for several months.
”As the UK and global economies continue to strengthen over the coming months, we expect conditions to continue to improve for UK manufacturers and to increasingly feed through to business investment.”
- 26% of firms reported that total order books were above normal in February and 23% said they were below giving a balance of +3%, an increase from January (-2%) and well above the long-run average (-17%), although below the levels in December (+12%)
- 18% said their export order books were above normal and 19% said they were below normal giving a balance of -1%, well above the long-run average (-20%)
- 41% of firms said the volume of output was up and 17% firms said it was down, giving a balance of +24%, an increase from +18% in January’s survey
- Firms expect output to continue to grow with 37% expecting output to increase over the next three months and 8% expecting orders to decrease, giving a rounded balance of +28%
- Output price expectations remained elevated (+17%) although marginally below January’s figure (+20%). 22% stated average prices at which domestic orders are booked were up and 5% said they were down
- Stock adequacy of finished goods (+10%) remained a little below average (+14%).