Manufacturers optimistic despite slide in output - CBI

22nd Mar 2024 12:11

(Sharecast News) - British manufacturers expect conditions to pick up in the coming months, a closely-watched survey showed on Friday, despite reporting another slide in output volumes.

According to the latest CBI Industrial Trends Survey, output volumes fell in the first quarter, with a weighted balance of -18. That was little changed on the previous three months to February, at -19.

Output fell in 11 of the 17 sub-sectors, including chemicals and motor vehicles and transport equipment.

Total order books were also below normal for March, with a balance of -18. That was marginally ahead of February's balance of -20 but below the long-run average of -13.

However, looking ahead and manufacturers struck a more optimistic tone, with a balance of 8 expecting output to rise modestly in the three months to June.

Anna Leach, deputy chief economist at the Confederation of British Industry, said: "It is disappointing that manufacturing output volumes fell in the first three months of the year, underperforming last month's expectations for a slight upturn.

"But manufacturers remain optimistic that conditions will improve in the quarter ahead.

"Manufacturers expect selling prices to rise a little in the months ahead. With demand still subdued, this likely reflects some pressure on input costs over recent months, slightly higher oil prices, higher shipping costs amid the Red Sea disruption and signs that the global industrial cycle is beginning to turn upwards again after a difficult couple of years."

Expectations for average selling price inflation rose to 21 from 17 in February, well above the long-run average of 7.

A balance is the weighted percentage of companies reporting an increase, minus those reporting a decrease.

A total of 289 manufacturing firms responded to the survey, which was conducted between 26 February and 13 March.