The survey by
the Confederation of British Industry (CBI) revealed on Thursday that the UK
manufacturers' order books improved slightly in April relative to March, but stood below “normal”.
According to
the report, the CBI's monthly factory order book balance increased to -26 this
month from -29 in the previous month. The April figure was the highest since
November 2024 (-19) but was reported as below “normal”. Economists had expected the reading to drop to -35.
The survey also
showed that the manufacturing output volumes were broadly unchanged in the
three months to April, after falling in the three months to March (-2, compared
to -18% in the three months to March), but were expected to drop slightly in
the three months to July (-5).
In other survey
results, manufacturing headcount reduced in the quarter to April at the quickest
pace since October 2020 (-16, compared to -8 in January), and manufacturers
expect numbers employed to decline again in the quarter to July (-11). Manufacturers’ average costs increased in the quarter
to April at an accelerated pace (+48, compared to +43 in January), and are
anticipated to hasten in the
quarter to July (+57). Business sentiment across the manufacturing sector
continued to worsen in April (-33, compared to -47 in January), while
manufacturers’ investment intentions for the year ahead remained subdued across
all categories – buildings (-38, compared to -42 in January), in plant &
machinery (-33, compared to -41), in product and process innovation (-22, compared
to -26), and in training and retraining (-20, the weakest since April 2020,
compared to-14).
Commenting on the
results of the latest monthly CBI Industrial Trends, Ben Jones, CBI lead
economist, said the recent downturn in manufacturing output appears to have eased,
but manufacturers still seem gloomy about their prospects amid rising costs, an
expected decline in new orders and heightened uncertainty around global economic
conditions. “The combination of financial pressures, market instability and
falling confidence is leading manufacturers to cut back employment and
investment, with plans for spending on buildings, equipment, innovation and
training all taking a hit,” he added. “The wider geopolitical environment is
becoming increasingly challenging for exporters, with export optimism falling
sharply for a second successive quarter and export order volumes now hovering
around post-pandemic lows."