UK manufacturing output is expected to drop

FEARS mounted over the outlook for UK manufacturers yesterday as the industry’s expectations for future output hit the lowest level for more than a year.

FEARS mounted over the outlook for UK manufacturers yesterday as the industry’s expectations for future output hit the lowest level for more than a year.

The CBI Industrial Trends Survey for November revealed that a balance of 9% of manufacturers expect output in the next three months to fall – the worst result since October 2011.

However, there was some hope as companies reported an improvement in export orders, with a balance of 12% reporting a drop, compared with 22% in October.

This was driven by sectors including mechanical engineering, food, drink and tobacco and motor vehicles and transport equipment, the CBI said.

But the chemicals sector – the largest export sector in the survey – reported a sharp drop. Howard Archer, chief UK and European economist at IHS Global Insight, said: “It is evident that manufacturers still face a tough environment.”

Survey results for the total order book remained broadly flat this month, with a balance of 21% of manufacturers reporting a drop in orders.

There was bad news for the Bank of England as a balance of 8% of manufacturers expect to increase prices charged at the factory gate, signalling further pressure ahead on the rate of inflation.

The whole economy returned to growth in the third quarter of the year when gross domestic product rose by 1%, ending the longest double-dip recession since the 1950s. However, experts have warned the rebound was driven by one-off factors and the underlying picture is much weaker.

 
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