Manufacturers’ export order books were fuller in December than for nearly three years and output is expected to grow for the first time in almost a year, according to the latest CBI monthly industrial trends survey.
The employers’ organisation said UK manufacturers were still struggling but it was clear the global recovery was filtering through and conditions were gradually improving.
Of the 886 firms answering the survey, 11 per cent said their export order books were above normal while 32 per cent said they were below normal. The balance of minus 21 per cent compares with minus 27 in the November survey. It means export orders were still below normal in December but were at their highest level since January 2001.
Taking domestic orders into account, 16 per cent of manufacturers said total order books were above normal while 35 per cent said they were below. The balance of minus 19 per cent indicates order books at their highest level since June 2002.
For the first time since January 2003 more manufacturers said output would rise over the next three months than said it would fall. The balance of plus five per cent compares with minus two per cent last month and with plus two per cent in January. While it does not represent substantial growth, these are the strongest expectations for output since October 2002 when the balance was plus eight per cent.
CBI Head of Economic Analysis, Doug Godden, said: ‘Manufacturers are still facing a really tough uphill battle with over a third saying order books remain below normal. But the survey suggests conditions are slowly getting better. Firms now expect to increase output, albeit by only a little, in the coming months.’
Competitive pressures have prevented manufacturers putting up prices to any significant extent for nearly seven years. Prices are expected to go on falling over the next three months but at the slowest rate since January 2001.
Increased demand has kept stock levels low. Stocks were more than adequate according to 20 per cent of respondents and less than adequate according to six per cent. The balance of plus 14 per cent is up on the plus 10 of last month but is the slowest rate of growth since June this year.