UK manufacturing output volumes fall in quarter to Aug: CBI survey

Manufacturers expect output to fall again over three months to November.

Total and export order books were both reported as below ‘normal’ and were below their long-run averages. Stocks of finished goods were more than adequate in August, but that adequacy stands below the long-run average.

Meanwhile, expectations for selling price inflation eased noticeably in August, with the expected pace of growth in selling prices over the coming quarter the weakest since October and around its long-run average, a CBI release said.

Total order books dropped by 33 per cent in August from a 30-per cent drop in July.

Export order books fell by 33 per cent in August from of 21 per cent in July. The balance also stands below the long-run average at minus 19 per cent.

Expectations for average selling price inflation eased in August. August’s expectations were the weakest since October 2024 and stand close to the long-run average at plus 7 per cent.

Stocks of finished goods were reported as more than ‘adequate’ in August (plus 7 per cent from plus 14 per cent in July). The level of stock adequacy is below the long-run average at plus 12 per cent.

“Manufacturers report that rising costs are squeezing margins and leaving customers more cautious, which in turn is hitting orders and weighing on output. With weak demand compounded by trade frictions and policy uncertainty, the outlook for UK manufacturers remains challenging,” CBI lead economist Ben Jones said.

“Against this backdrop, the upcoming Autumn Budget is a pivotal moment to shore up business sentiment. The government must provide business tax certainty and further Growth and Skills Levy flexibility, accelerate industrial and infrastructure strategy implementation, and broaden support to tackle uncompetitive energy prices,” he added.

ALCHEMPro News Desk (DS)