MANUFACTURING CONDITIONS REMAIN CHALLENGING
Manufacturers' order books remained depressed last month, with demand for UK-made goods at home and abroad still very weak, and firms expecting little change in production in the coming quarter.
Of the 555 UK manufacturers responding to the CBI’s latest monthly Industrial Trends Survey, 8% of firms described the volume of their total order books as above normal, while 56% said they were below normal, giving a balance of -48%. That was a slight improvement on the balance of –54% in August, but is the 15th consecutive month where a negative balance has been recorded.
Export order book levels were well below normal, despite the relative weakness of Sterling. 7% of manufacturers said they were above normal and 53% said they were below normal. That gives a balance of -46%, little changed from -48% in August.
Firms anticipate little change in production in the coming quarter, with 27% expecting volumes of output to fall in the next three months, while 25% predict an increase. The resulting balance of -2% compares with a balance of -5% in August, and is the least negative prediction since June 2008 (+2%).
Ian McCafferty, CBI Chief Economic Adviser, said:
"The end of the dramatic de-stocking that characterised the first half of the year has allowed manufacturing output to stabilise, but order books remain depressed, and the outlook uncertain.”
Stock adequacy held steady in September, with a balance of 13% of firms reporting levels more than sufficient to meet demand.
Manufacturers are also expecting little change in domestic prices over the next quarter (a balance of -4%), suggesting that worries about the threat of deflation are receding.
17 September, 2009
Notes to Editors:1. A balance is the difference between the percentage of manufacturers reporting an increase and those reporting a decrease.
2. The September 2009 CBI Industrial Trends Survey was conducted between 25th August and 9th September. 555 manufacturers took part.
3. During the survey period the pound averaged euro 1.14 and $1.63, while Brent Crude averaged $69.46 a barrel, compared with euro 1.17and $1.66 and $71.76 per barrel in the August survey period.
4. 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.
Media Contact:CBI Press Office on 020 7395 8086, out of hours pager 07623 977 854, or email press.office@cbi.org.uk