Manufacturing output growth ‘remains robust’ Magazine

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Manufacturing order books and export order books remained well above their years to come average, in line with the latest monthly CBI Industrial Trends Survey.

According on the survey of 397 manufacturers, output grew with a healthy pace in the 12 weeks to February.

Growth was broad-based with output growing in 16 from 17 sub-sectors with growth predominantly driven by Food, Drink and Tobacco, and Auto and Transport Equipment sub-sectors.

Respondents anticipate that output growth will slow a little bit above the next 3 months, broadly matching the interest rate observed in September and October not too long ago.

Expectations for output price inflation weakened from last month’s 34 year high, but remain higher than the historical average. Meanwhile, stocks were thought to be above adequate levels, but within the long-run average.

Looking at development in the economy more broadly, momentum was tepid for many of 2017. We expected similarly subdued growth to persist further ahead.

Demand during the manufacturing sector should carry on being buoyed via the lower pound and buoyant global economy. Nonetheless the CBI said they expect consumer-facing companies and retailers to carry on to struggle while consumer incomes remain stressed from higher inflation.

“This month saw another strong showing from UK manufacturers. Although order books weren’t quite as buoyant while they were recently, demand remains strong and output grew briskly,” said CBI Head of monetary Intelligence, Anna Leach.

“With the Brexit negotiations reaching an essential juncture, many businesses are concerned about future barriers to trade and tend to be interested in clarity over the future relationship with the EU.

“Remaining in a comprehensive customs union will help alleviate some of those fears and present firms the boldness to speculate and grow.”

Tom Crotty, Group Director of Ineos and Chair of CBI Manufacturing Council, added: “Manufacturers are benefitting within the health on the global markets. But companies still tough get the workers they need to boost their business.

“To ensure there’s a strong pipeline of people using the technical skills needed, we require youth for further education and careers advice built upon the demands of employers.”

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