Output grows in manufacturing sector – CBI

10 June, 2016

The survey of 489 manufacturers found that a rebound in the food & drink sector, following localised flooding earlier this year, drove an increase in overall output in the three months to May. Excluding food and drink, the output balance was stable, with the other 17 manufacturing sectors showing minimal movement.

Total orders rose slightly and exports orders were largely unchanged, with both remaining above their respective long-run averages.

Meanwhile, little change in prices is expected in the months ahead and output expectations remain strong.

Improving order books

Rain Newton-Smith, CBI director of economics, said: “Conditions in the manufacturing sector seem to be a little better overall, with improving order books compared with a couple of months ago. But domestic and global uncertainty remains high, alongside lacklustre export demand.

“Despite recent choppiness in emerging markets, China and India remain significant sources of potential demand. An exports commission would enable exporters to better exploit the growth opportunities provided by these and other growth markets.

“Manufacturers need to work in partnership with the Government to embrace long-term opportunities and trends, particularly in digital. A greater focus is also required on developing the right skills in the sector, managing energy costs, and encouraging further R&D investment.”

Key findings

• 16 per cent of businesses reported an increase in total orders (up from -11 per cent in April), and 24 per cent a decrease, giving a balance of -8 per cent.

• 15 per cent of businesses reported an increase in export orders and 29 per cent a decrease, resulting in a balance of -14 per cent.

• 36 per cent of businesses reported a rise in output volumes, and 23 per cent a decrease, giving a rounded balance of +12 per cent, up from +1 per cent in April.

• Output is expected to increase over the next three months, with 32 per cent companies suggesting a rise and 12 per cent expecting a decrease, leaving a balance of +20 per cent.

• Average prices are expected to fall over the next quarter, with 15 per cent companies indicating an increase and 13 per cent suggesting a decrease, giving a balance of +2

• 13 per cent of businesses reported stocks as more than adequate, and 4 per cent less than adequate, leaving a rounded balance of +10 per cent.