22 June 2020
Manufacturer output volumes in the three months to June fell at the fastest rate on CBI survey record (since July 1975), having slightly surpassed the recent record set in May 2020. That’s according to the latest CBI monthly Industrial Trends Survey.
The survey of 360 manufacturers found that output volumes declined in 15 of 17 sub-sectors, with the headline drops in output primarily driven by the motor vehicles & transport equipment, mechanical engineering, and metal products.
Total order books remained poor by historical standards, despite improving slightly on last month. Meanwhile, export orders books worsened on the previous month, falling to their lowest on survey record (since April 1977).
Looking ahead, manufacturers expect the pace of decline in output volumes to slow in the next quarter. Firms anticipate that output prices in the next three months will fall at a slower pace.
Anna Leach, CBI Deputy Chief Economist, said:
“The UK manufacturing sector remained in a deep downturn in June due to the ongoing COVID-19 crisis. Output volumes declined at a new record pace and export order books fell to an all-time low, reflecting the significant fall in demand in the UK and abroad. Firms are again hoping that this will ease somewhat in the next three months.
“The Government has already undertaken a huge amount of work to provide financial lifelines to businesses throughout this unprecedented period. With firms having been encouraged to restart operations, the Government must continue to engage with the sector to understand their specific concerns and provide support as needed.”
Tom Crotty, Group Director, INEOS and Chair of the CBI Manufacturing Council, said:
“The COVID-19 crisis has been hugely challenging for the manufacturing sector, and these figures reflect the tough circumstances faced by firms across the country.
“Government support measures have been a relief to the sector and have undoubtedly saved jobs during this crisis. As well as continuing to support the sector during the current pandemic, it is critical that the government works with firms to develop a long-term plan to grow a resilient UK manufacturing sector focused on skills, productivity, and sustainability.”
• Output volumes in the three months to June (-57% from -54% in May) fell at their fastest pace on record since July 1975.
• Output dropped in 15 out of 17 sub-sectors. The headline fall in output volumes was driven by the motor vehicles & transport equipment, mechanical engineering, and metal products sub-sectors.
• Looking ahead, manufacturers expect output to fall at a slower pace in the next three months (-30%).
• Total order books (-58%) improved slightly on May (-62%) but remain poor by historical standards (compared to a long-run average of -14%).
• Export order books (-79%) worsened on May (-55%), falling to their lowest on record (since April 1977).
• Average selling prices for the next three months are expected to fall at a slower pace (-10% from -20% in May).
• Stock adequacy (+20% from +23% in May) remained above its long-run average (+13).