UK manufacturing output falls at slower pace in quarter to Sept: CBI

Expectations for selling price inflation eased in September, with the expected pace of growth in selling prices over the coming quarter the weakest since October 2024, and below the long-run average, CBI said in its latest Industrial Trends Survey (ITS).

Output volumes fell in the three months to September, after falling at a sharp pace in the three months to August (weighted balance -13 per cent, from -22 per cent in the quarter to August). Manufacturers expect output volumes to decline again in the three months to December (-14 per cent).

Output decreased in 13 out of 17 sub-sectors in the three months to September. Total order books were reported as below ‘normal’ in September (-27 per cent, from -33 per cent in August). The level of order books remained significantly below the long-run average (-14 per cent).

Export order books were also below ‘normal’, to a similar extent as August (-32 per cent, from -33 per cent in August). The balance also stands below the long-run average (-19 per cent).

Expectations for average selling price inflation eased in September (+4 per cent, from +9 per cent in August).? Selling price expectations have eased considerably since a recent high in January (+27 per cent) and stand at their lowest since October 2024 (0 per cent).

Stocks of finished goods were reported as more than ‘adequate’ in September (+12 per cent, from +7 per cent in August) and stand in line with the long-run average (+12 per cent).

Ben Jones, CBI lead economist, said, “Manufacturers report a mix of pressures weighing on the sector: high energy costs, uncertainty over taxation and economic policy, and ongoing difficulties in accessing skilled labour. In this environment, planning for growth is extremely challenging, and this is feeding through to weaker orders, output and investment. While the pace of decline has eased, conditions look set to remain tough through to the end of the year.”

“Businesses across the board are looking ahead to the November Budget with hope that it delivers meaningful action to ease cost and regulatory pressures. Without that clear policy direction, confidence will continue to ebb and firms will find it increasingly difficult to invest, hire and grow. They also hope to see the government use the coming weeks as an opportunity to refine the Employment Rights Bill so that a pragmatic and workable landing zone that avoids unintended consequences for growth can be found,” added Jones.

The survey was based on the responses of 290 manufacturers.

ALCHEMPro News Desk (SG)