Manufacturing orders fall – CBI

Twenty five per cent of respondents to the latest CBI quarterly Industrial Trends Survey, said output rose, while 28% said it fell. The resulting balance of -3% is the lowest since October 2009 and disappointed expectations of growth. However, over the next three months, manufacturers do expect a moderate recovery in output, with a balance of +12%, which, if realised, would be the strongest growth since the three months to January 2011. The volume of total orders fell unexpectedly over the last three months, with both domestic and export orders dropping below their long-run averages. Nonetheless, said the CBI, expectations for the coming three months had not been dented by these results: expectations for domestic orders growth remain unchanged relative to the previous quarter, while export orders are once again expected to be broadly flat. The survey suggests that concerns about political and economic conditions abroad have risen. The proportion of firms citing this as the factor most likely to limit export orders increased from 25% in the three months to July to 34%, well-above the long-run average of 22%. In line with somewhat softer activity, optimism regarding the business situation and export prospects for the year ahead both deteriorated. Furthermore, concern grew over orders and sales acting as a constraint on output in the coming three months. Other indicators in the survey held up better. Numbers employed rose for the ninth-consecutive quarter, the longest run of rising headcount in the quarterly survey's history (since 1972). Anna Leach (pictured), CBI head of economic analysis, said UK companies were increasingly concerned by political and economic conditions abroad, whether it is ongoing weakness and uncertainty in the Eurozone "or the approaching fiscal cliff in the US".