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CBI survey reveals pressures on manufacturing

UK manufacturers are predicting a fall in output volumes over the next three months, according to a survey from the Confederation of British Industry which underlines the continuing pressures facing the sector.

Howard Archer, chief UK economist at consultancy IHS Global Insight, warned that yesterday's CBI survey "does little to ease fears that the economy could suffer a renewed GDP [[gross domestic product] dip in the fourth quarter". GDP rose by 1% in the three months to September, after three consecutive quarters of significant contraction.

Of the 409 manufacturers which responded to the CBI's latest monthly industrial trends survey, which was conducted between October 24 and November 14, only 19% expect to raise output volumes over the next three months. Meanwhile, 28% predict a fall.

The resultant net 9% predicting a drop in output is the worst reading for this survey question so far this year. It is also well below the long-run survey average of a net 6% predicting a rise in output volumes.

Only 16% of manufacturers reported total order books were above normal and 36% declared them worse than usual. The resultant rounded net 21% saying order books were below normal was a slightly worse reading than the survey average of a balance of 17% of respondents reporting such a position.

A net 12% of manufacturers said export order books were below normal. This was a significant improvement on the net 22% reporting such a position in last month's survey, and better than the long-run average of a balance of 21% reporting below-normal export order books.

Anna Leach, CBI head of economic analysis, said: "Overseas demand has improved in this month's survey, but this has not been enough to lift overall demand and support modest expectations for growth in production levels found in the previous survey."

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