NEWS
RELEASE

Of the 566 manufacturers taking part in the June Industrial Trends survey, 6% said export order books were above normal, while 58% described them as below normal. The resulting balance of -52% is the lowest since October 1998 (-55%), reversing the slight improvement that had been seen since March.

However, there has been a modest improvement in total order book levels, suggesting that domestic conditions are no longer quite as weak. The pace of decline in output has also slowed.

Ian McCafferty, the CBI’s Chief Economic Adviser, said:

“Export orders are no better than they were a few months ago, reflecting the continued weakness of overseas demand for UK-made goods. As such, conditions for UK manufacturers remain challenging with volumes of total orders still at very weak levels.

“However, manufacturing firms do expect output to fall at a much slower pace compared to the beginning of the year, as the drastic action they have taken to reduce stocks appears to be paying off. Although the stock position somewhat improved on previous months, stock levels remain high relative to demand.”

While 10% of firms reported total order books above normal, 61% said they were below normal, giving a balance of -51%. That is a slight improvement on the previous four months when the balance hovered between -56% and -58%.

Manufacturers expect output to drop at a much slower pace over the coming quarter compared with earlier in the year. 17% of firms expect the volume of output to increase over the next quarter, while 34% expect it to fall. That gave a balance of -17%, which was unchanged on May’s figure, but a marked improvement on April’s balance of -32%.

Firms surveyed are still planning to lower their domestic prices over the next three months (a balance of -6%), but at a much slower rate than expected only a month or two ago (balances of -13% in May and -20% in April).