UK business organisation the Confederation of British Industry (CBI) released its latest Industrial Trends Survey on Thursday, which showed that over the past three months the UK’s manufacturing sector’s total orders and rate of output growth reached its best recorded levels, the strongest for 18 years.
According to the CBI Industrial Trends Survey of 345 UK manufacturers, conducted between 24 October and 13 November, 36% of firms reported that total order books were above normal in November, while 25% said they were below average. These figures resulted in highest balance since March 1995 of +11%. Export order books were reported as being 28% above normal in November and 27% were below, giving a much higher a balance of +1% compared to the long-run average of -20%.
Volume of output in the three months to November also increased at its fastest pace since January 1995, with the figures resulting in a balance of +29%. The CBI said that manufacturing businesses anticipate that the robust growth in output will continue at a similar pace in the next three months, with 44% of firms expecting to raise output, while 20% expect to reduce output, giving a balance of +24%.
The CBI survey showed that stock adequacy of finished goods was below average at +7% for the third consecutive month, however expected price growth increased from October’s fifteen-month low to +5%.
Stephen Gifford, CBI Director of Economics, commented:
“This new evidence shows encouraging signs of a broadening and deepening recovery in the manufacturing sector. Manufacturers finally seem to be feeling the benefit of growing confidence and spending within the UK and globally.
“Both order books and the pace of output growth are the strongest they’ve been since 1995, and firms are expecting similar-paced growth over the coming three months as well.
“But challenges remain. UK exporters need government support to break into high-growth export markets to reduce their vulnerability to any further Eurozone flare-ups.”