Demand remains robust for UK manufacturing firms

The latest Industrial Trends Survey of 432 manufacturers found that total order books and export order books were strong. In total, 30% of manufacturers reported total order books to be above normal and 17% below normal – giving a balance of +13% (above the long-run average of -14%).

Meanwhile, 22% of firms said their export order books were above normal and 10% below normal – giving a rounded balance of +11% (well above the long-run average of -19%).

Additional findings show 42% of businesses said the volume of output over the past three months was up and 12% down – giving a balance of +30% (above the long-run average of +3%).

Manufacturers also expect output to grow at the same robust pace in the coming quarter, with 38% predicting growth and 7% a decline – giving a rounded balance of +30%. Expectations for growth in average selling prices for the coming three months were higher in August (+19%) than they were in the month before (+9%) – above the long-run average of +2%

Stocks were considered to be just above adequate levels, after dipping below in July, but remained below the long-run average.

Says CBI head of economic intelligence Anna Leach: “There are further signs that exporters are feeling the benefit from the lower pound in this month’s figures, and output growth is expected to power on over the coming quarter.

“But after a brief pause last month, expectations for selling prices have rebounded, indicating that the squeeze on consumers is set to persist. We expect CPI (Consumer Price Index) to top out at around 3% towards the end of this year and remain close to that level during 2018, as the effect of the weak pound continues to feed through.”