UK manufacturers have strong expectations for output growth

UK manufacturers’ expectations for output growth are at their strongest for a year, but companies also expect to have to raise prices significantly, according to the CBI.

Of the 436 manufacturers responding to the CBI’s latest monthly Industrial Trends Survey, 39 per cent believe that output would rise in the next three months, while 15 per cent expected that it would fall. The resulting balance of +24 per cent is the strongest since March 2011 (+27 per cent).

Order books in March remained well above their long-run average, and their levels of late last year, albeit a little lower than last month. While 18 per cent reported total orders were above normal, 26 per cent said they were below.

The resulting balance of -8 per cent is stronger than the long-run average for this measure (-17 per cent).

Similarly, at -11 per cent, export demand also weakened, but remained considerably above its long-run average (-21 per cent).

However, expectations for output price inflation have picked up. A balance of +24 per cent of companies expect to raise output prices in the coming quarter, the highest since June 2011 (+27 per cent).