The latest Industrial Trends Survey from the CBI has revealed export orders remain strong and well above average.
Although output growth in manufacturing eased in August, a survey of more than 300 firms shows that output growth was expected to continue at a similarly firm pace over the next three months.
Anna Leach, CBI Head of Economic Intelligence, said:
“Manufacturing growth remains strong, supported by the lower level of sterling and strong global economy. But risks to that growth remain high in light of international trade tensions and the uncertainty caused by Brexit. Firms will be keen to see urgent progress on the Withdrawal Agreement to lock in transition, which is crucial to continuing frictionless trade as the UK leaves the EU.
“Make no mistake, a ‘no deal’ scenario would be immensely damaging not just for UK manufacturers, but also the rest of the EU. So both sets of negotiators need to demonstrate flexibility and compromise to protect trade flows worth 600 billion euros each year, particularly against the backdrop of increasing protectionist rhetoric.”
Key findings:
- 31% of manufacturers reported total order books to be above normal, and 23% said they were below normal, giving a rounded balance of +7%
- 24% of firms said their export order books were above normal, and 15% said they were below normal, giving a balance of +9%
- 39% of businesses said the volume of output over the past three months was up, and 18% said it was down, giving a balance of +21%
- Manufacturers expect output to grow at a similar pace in the coming quarter, with 32% predicting volumes to increase, and 13% expecting a decline, giving a rounded balance of +20%
- 17% of companies expect average selling prices to increase in the coming three months, with 2% predicting a decrease, giving a balance of +15% (compared with +13% in July)
