First rise for manufacturing orders in a year
24 Jul 2013
New orders in the UK’s manufacturing sector rose in the three months to July for the first time in a year, according to the latest statistics by business lobby group the CBI.
The body’s latest quarterly Industrial Trends Survey, published today, also found that optimism among manufacturers grew for the second quarter in a row, while production continued to rise modestly.
Employment in the sector also continued to rise, recording the strongest growth in a year. This growth marked the 12th consecutive quarter of hiring, a survey record.
The survey of 390 firms found that both domestic and export orders rose, with domestic orders recording the strongest growth in a year, and export orders the fastest in more than two years.
Firms anticipate a further modest rise in orders and output in the coming three months, and expectations for growth in new domestic orders are at their highest since April 2012.
“Manufacturers have seen a pick-up in activity across the board this quarter, with new orders and production continuing to rise,” said CBI director of economics Stephen Gifford.
“Optimism in the sector has risen again, and demand conditions are expected to improve further in the coming three months.”
Elsewhere, there were signs of the squeeze in manufacturers’ margins easing.
Domestic price inflation picked up a little in the three months to July but growth in manufacturers’ unit costs fell to a year-low and is expected to fall further in the coming quarter.
Manufacturers remain concerned about political and economic conditions abroad limiting export orders
CBI director of economics Stephen Gifford
However, despite a further rise in optimism, investment intentions remained muted.
The CBI survey found that planned spending over the next 12 months (compared with the previous 12 months) on buildings is expected to be unchanged, while planned capital expenditure on plant and machinery deteriorated slightly, though remained above average.
When asked about factors likely to limit investment, manufacturers most often cited uncertainty about demand, which was of slightly greater concern than usual.
“Manufacturers remain concerned about political and economic conditions abroad limiting export orders, which is likely to reflect heightened uncertainty over the global economic outlook,” said Gifford.
