CBI survey reports healthy order books for manufacturers

UK manufacturers continue to report healthy order books but expect slightly slower growth in the coming quarter, according to the CBI.

Of the 457 manufacturers responding to the business organisation’s latest monthly Industrial Trends Survey, 27 per cent of manufacturers described total orders as above normal, while 26 per cent said they were below normal.

The resulting balance of +1 per cent is well above the long-term average (-18 per cent), and is a slight improvement on the previous month’s balance of -2 per cent.

Export order books also picked up slightly in June, with 27 per cent of firms saying they were above normal, and 27 per cent below normal.

The resulting balance of 0 per cent compares with -3 per cent in May, and is significantly above the long-term average (-21 per cent). It is a continuation of the broader trend of improvement that has been evident over the past two years.

Manufacturing firms still expect solid growth in output in the coming quarter. While 28 per cent predict output will rise in the coming three months, 14 per cent predict it will fall.

The resulting rounded balance of +13 per cent is down slightly on very strong expectations seen over the past five months, but still exceeds the long-term average (+5 per cent).

However, price pressures remain a concern, with 31 per cent of manufacturers predicting they will raise output prices over the coming quarter, and five per cent expecting to lower prices.

Ian McCafferty, chief economic adviser at the CBI, said: ’Expectations for growth have moderated compared with recent months, when output prospects were particularly strong.

‘This reflects the slightly softer patch for manufacturing evident in other economies, much of which appears due to the temporary supply chain disruptions following the tsunami in Japan.’