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UK manufacturers see solid growth in production ahead says CBI

UK manufacturers expect strong output growth in the coming quarter, backed by healthy order books, according to a survey.

The CBI’s latest monthly Industrial Trends Survey, revealed that 22% of manufacturers described total order books as above normal, while 24% said they were below normal.

The CBI said that the resulting balance of -2% is well above the long-term average and an improvement on the previous month’s balance of -11%.

Ian McCafferty, CBI chief economic adviser, said: “Although there has been talk recently that the manufacturing recovery may be starting to flag, our survey shows manufacturers are still seeing solid growth in activity.

“Total and export order books are both well above their long-run averages and, with demand healthy, firms are predicting another strong rise in output.”

With demand steadily improving, the CBI said manufacturers predict solid output growth in line with previous months; a balance of +20% of firms expect output to rise in the next three months, compared with +22% in April.

The organisation said that price pressures have moderated visibly this month, though they remain a concern.

A balance of +24% of manufacturers predicted they will raise output prices over the coming quarter, following +36% in April.

The CBI said this is the lowest expected rate of increase since January, but is still strong compared with last year.

He added: “Predictions for output price inflation have moderated compared with earlier this year, which is encouraging. However, they are still very strong by historical comparison, reflecting high commodity prices and import costs, and inflationary pressures remain a concern.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .