Manufacturing marches on

Activity in the UK manufacturing continued its upward trend in March and overall demand continued to rise, with total orders improving. 

This is the conclusion of the CBI’s latest Industrial Trends Survey, which notes output growth and export orders easing in the same period.

The survey of 368 manufacturers found that total order books improved slightly again in the three months to March. According to CBI, this strength was broad based, with above-average results in 14 out of 17 sectors. Export orders fell back, but remained above average in 11 out of 17 sectors.

Output growth also slipped to a five-month low, but still remained firmly above average. Growth is expected to edge up over the next three months, albeit at a slower pace than predicted in January and February.

Carl Williamson, manufacturing sector lead at Lloyds Bank Commercial Banking, Mid Markets, said: ’The CBI’s research shows that manufacturers have had mixed fortunes in selling their goods abroad in recent months. The Chancellor’s commitment to back export funding, increase the investment allowance and reduce energy bills will instil some confidence in UK factories to make capital investments and look beyond their domestic markets for growth opportunities.’

Key Findings:

·         29 per cent of firms reported that total order books were above normal and 23 per cent said they were below normal, giving a balance of +6 per cent, an improvement on February (+3 per cent) and well above the long-run average (-17 per cent)

·         18 per cent of firms said their export order books were above normal and 27 per cent said they were below normal, giving a rounded balance of -10 per cent

·         36 per cent of firms said the volume of output over the last three months was up and 21 per cent said it was down, giving a balance of +15 per cent, well above average (+2 per cent), but the lowest balance since October (+8 per cent) and down on last month’s result (+24 per cent)

·         Firms expect output to grow in the coming quarter with 37 per cent predicting growth over the next 3 months and 18 per cent a decline, giving an overall balance of +19 per cent

·         Output price expectations moderated (+12 per cent) compared with February (+17 per cent)

·         21 per cent of firms said their present stocks of finished goods were more than adequate and 7 per cent of firms said they were less than adequate, giving a balance of +14 per cent, the highest balance for seven months.