According to the latest CBI/Accenture monthly Industrial Trends Survey, UK manufacturers reported a slight fall in output in the three months to September, with a much sharper decline expected in the next three months. This is the weakest expectation for output growth since the three months to January 2021.
The survey found that total order books were seen as broadly normal in September, while stocks were more than adequate for the first time since April 2021. Manufacturers continue to expect a rapid increase in average selling prices in the coming quarter (+59% from +57% last month).
The survey, based on the responses of 238 manufacturing firms, found:
- Output in the three months to September fell at a broadly similar rate as in the three months to August (balance of -4% from -7%). Output is expected to fall at a faster pace in the next three months (-17%).
- Output fell in 8 out of 17 sub-sectors, with the overall decline being largely driven by food, drink and tobacco. This was largely offset by strong growth for motor vehicles and transport equipment firms.
- Order books in September were seen as broadly normal, after being below normal last month (-2% from -7%; average is -18%), while export order books remained below normal (-8% from -12%; average is -19%).
- Stocks were seen as more than adequate and to the greatest extent since February 2021 (+6% from +2% last month).
Anna Leach, CBI Deputy Chief Economist, said:
“It is clear that the downturn, which originated in consumer-facing services, has spread to manufacturing, with output falling for the second month running. When adding an uncertain demand environment to ongoing input and labour shortages, and a cost-of-doing-business crisis, the outlook looks increasingly challenging for the sector.
“If the country is going to fulfil the government’s ambitious plans to supercharge economic growth, businesses need the confidence and the capital to invest. The announcement of support on energy bills is a good first step, and the CBI looks forward to working in lockstep with the Government going forward.”