Manufacturers predict production growth
Sep 22 2011
Manufacturing companies see production increasing over the coming quarter
UK manufacturers predict that production will continue to grow over the next three months, despite order book levels slackening during September, the Confederation of British Industry (CBI) finds.
Of 470 manufacturers responding to the CBI’s latest monthly Industrial Trends Survey, 22 per cent describe total orders as above normal, with 31 per cent say they were below. The resulting rounded balance of -9 per cent indicates order book levels slipped back in September, though this measure remains well above its long-term average (-18 per cent).
Perceptions of export order book levels also dipped, to the lowest level (-12 per cent) since October 2010 (-21 per cent). However, they also remain well above the long-term average (-21 per cent).
Despite this, firms predict production will increase over the coming quarter. While 29 per cent of manufacturers think output will rise in the next three months, 20 per cent anticipate it will fall. The resulting balance of +9 per cent remains above the long-term average (+6 per cent), though part of a trend of slowing expectations since March’s peak (+27 per cent).
Pricing pressures strengthened slightly but are significantly less intense than in the first half of the year. 24 per cent of manufacturers predict that they will raise output prices over the coming quarter, and 10 per cent expect to lower prices. The resulting rounded balance of +13 per cent is slightly up from August's +9 per cent.
CBI chief economic adviser Ian McAfferty says, ‘UK manufacturers report some slackening in demand this month, following the volatility in financial markets and the slowdown in growth in our major trading partners. As a result, firms now say stock levels are high relative to expected demand.
‘Nevertheless, UK manufacturers remain optimistic that production will continue to grow over the coming three months.’
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