Moderate growth on the horizon for UK manufacturing – CBI

Of the 436 manufacturers contributing to the CBI Monthly Industrial Trends Survey for February, 15% reported that order books were above normal while 29% said they were below, the balance of -14% being 6 points better than the January figure and a little above the long-run average (-17%). Export orders also improved somewhat, registering a balance of -20% in line with the long-run average (-21%), but remaining well below December levels (-11%). Looking ahead, manufacturers expect some moderate growth in output over the next quarter, driven mainly by motor vehicles & transport equipment and food, drink & tobacco. Expectations for output price inflation for the next quarter remain high with motor vehicle & transport equipment manufacturers reporting their strongest inflation expectation in four years, offsetting the cooling of price expectations in the food, drink & tobacco sector. CBI head of economic analysis Anna Leach said the rebound in manufacturing orders and expectations for output growth provided signs of improvement in the outlook for the UK economy. "However," she warned, "export order books are likely to remain relatively weak until global conditions, especially in the Eurozone, improve more markedly."