Overall demand for manufactured goods changed little in February, according to the latest CBI industrial trends survey. CBI economists forecast above-trend growth to continue in 1997, with GDP growth averaging 2.8% for the year and 2.6% in 1998.
Underlying retail price inflation is forecast to fall to 2.2% by the end of 1997. The December forecast was 2.5%. Output price inflation is expected to remain subdued ending the year at 2.3%, before rising to 2.8% by the end of 1998.
Increases in manufacturers’ input and output prices continued to slow last month, according to official figures. The rise in output prices for UK sales of manufactured products was 1.5% in January, compared with 1.7% in December – the lowest rate of increase since October 1986.
A rise in export turnover of almost 20% in the last three months of 1996 helped push up business in the machine tool sector. Total orders on hand in December 1996 were £588m, up 7.1% on September 1996.
Spending by the Department of the Environment on R&D in 1997-98 is projected to be £101.4m. Of this £18m is allocated to technology transfer. More than £10m is to be spent on research on air quality.