Manufacturing orders fall, says CBI

The business body’s latest Industrial Trends Survey shows that total order books climbed down a little from February’s six-month high, but remained well above average, with fifteen of the survey’s eighteen sub-sectors reporting stronger than average orders.

Sluggish export performance seems to be a headache that won’t go away

CBI’s Rain Newton-Smith

Export orders weakened significantly from February’s half-year high, falling below their long-run average.

However, despite this slight cooling in the market, the survey of 468 manufacturers found that they expect to ramp up production even further in the next three months.

“Our manufacturers lost some of their steam from last month, but they continue to move steadily along a decent growth track,” said CBI economics director Rain Newton-Smith.

“Sluggish export performance seems to be a headache that won’t go away, with a still subdued Eurozone and headwinds from a stronger pound. With emerging markets facing a tough time and uncertainty continuing to hang over the Eurozone, firms are having to work even harder for opportunities to sell their products and services around the world.”

The CBI survey follows the publication earlier this month of the Office for National Statistics (ONS) latest Index of Production (IoP).

It revealed that UK manufacturing output decreased by 0.5% in January 2015 compared with December 2014.

However, despite these monthly falls, UK manufacturing is still in a stronger position when assessed on a quarterly basis compared to a year ago.

“The fall shouldn’t be of concern, as other business surveys point to positive underlying momentum in manufacturing,” said EEF chief economist Lee Hopley.

“Overall we’re still expecting robust growth in manufacturing this year as global uncertainty levels out and expectations among most manufacturers remain strong.”

EEF is currently projecting 1.7% growth this year in manufacturing.