UK manufacturing output falls in March as order books remain weak: CBI

Output fell in 14 of 17 sub-sectors in the three months to March, CBI said in a press release.

Total order books in March were reported as below normal at -29 per cent, remaining significantly beneath the long-run average of -13 per cent, as per CBI’s latest monthly Industrial Trends Survey (ITS).

Export order books, though still below normal, improved to -29 per cent from -36 per cent, yet remained under the long-term average of -18 per cent.

The average selling price expectations were stable at +22 per cent, staying well above the historical average of +7 per cent. Stocks of finished goods were considered more than adequate at +16 per cent, an increase from +4 per cent in February and above the long-run average of +12 per cent.

“Conditions in the UK’s manufacturing sector remain subdued. Although there are some pockets of strength, notably in the aerospace and defence sectors, many firms continue to report that their order books remain weak,” said Ben Jones, lead economist at CBI. “Manufacturers responding to the survey reported that customers are generally nervous about proceeding with capital investments and are conserving funds ahead of upcoming increases to National Insurance and minimum wages, leading orders to be cancelled or at least delayed until later in the year.”

“While output expectations are not as gloomy as at the turn of the year, the sector looks set to remain in a holding pattern in the short-term. Next week’s spring statement and continuing challenges to the public finances means a lot of the growth the country needs will have to come from the private sector. But businesses need a reason to grow and invest in uncertain times,” added Jones. “A number of measures could help boost confidence-setting an ambitious R&D spending target so the government can position the UK as a world leader for innovation or ensuring that the apprenticeships levy is fully flexible to allow companies to invest in a range of employee training, will go some way to delivering the sustainable growth the country needs.”

ALCHEMPro News Desk (SG)