An unsettling September

Manufacturing orders remained well below normal in September with increasing costs putting further pressure on manufacturers’ profits, the CBI’s monthly Industrial Trends Survey reveals today.

Demand for manufactured goods remains subdued. The survey shows 39 per cent of firms reporting total order books below normal, while 12 per cent say they are above normal, a balance of minus 27 per cent. September's balance for total order books was only slightly up on August when it had been the lowest since October 2003.

Cost pressures have further intensified for manufacturers. Oil prices averaged almost $65 per barrel in the survey period - 58 per cent higher than a year ago - while freight costs were up 33 per cent compared with August. According to the survey, manufacturers are unable to pass these costs onto their customers, with a majority (a balance of 8 per cent) expecting to cut prices rather than raise them.