The survey by the Confederation of British Industry (CBI) revealed on Tuesday
that the UK manufacturers' order books improved in December, recovering from its 34-month
low reached in November
According to the report, the CBI's monthly factory order book balance rebounded
to -23 in December from -35 in the previous
month. The
December figure was the highest in three months but remained below its long-run
average (-13).
The survey also showed that the manufacturing output volumes were
unchanged in the three months to December (0, compared to -17 in the three
months to November), and were expected to increase slightly in the three months
to March (+5). In other survey results, expectations for average selling price
inflation changed little in the three months to December (+7, compared to +11
in the three months to November) and were on a par with the long-run average
(+7). Stocks of finished goods were considered more than adequate in December
(+11, compared to +3 in November).
Commenting on the latest survey results, Anna Leach, CBI Deputy
Chief Economist, noted that the UK manufacturers appeared to have ended the
year on a stable footing with December’s results only the second set this year not to show falling activity. However, she warned that the environment for British manufacturing is likely to remain challenging, with global growth set to remain
weak in the year ahead. “High interest rates will continue to weigh on household
spending while adding to business costs. And sticky domestic inflation and
strong wage growth suggest cuts to UK interest rates are still some way off,” Leach
added.