Demand in the manufacturing sector was stable and output continued to expand at a solid pace, according to the latest monthly CBI Industrial Trends Survey.
The survey of 482 manufacturers reported that total order books strengthened slightly in the three months to June led by the food and drink sector, and motor vehicles & transport.
Total export order books likewise remained unchanged, suggesting that the depreciation of Sterling has yet to have a material impact on overseas demand. Output growth continued to be brisk, with firms raising their expectations for the next three months further. Meanwhile, selling prices are expected to be broadly stable in the near-term.
Rain Newton-Smith, CBI Chief Economist, says: “The recent fall in the pound appears to have done little for our exporters. It may be that the growing uncertainty in the run-up to the EU referendum, combined with global risks elsewhere, has offset some of the benefits of a weaker currency at this time.
“But while British manufacturers had a tricky start to the year, there are more positive signs as output and demand stabilise.”
· 20% of businesses reported an increase in total orders and 23% a decrease, giving a rounded balance of -2%
· 13% of businesses reported an increase in export orders and 27% a decrease, resulting in a balance of -14%
· 30% of businesses reported a rise in output volumes, and 19% a decrease, giving a balance of +11%
· Output is expected to increase over the next three months, with 35% companies expecting a rise and 13% expecting a decrease, leaving a rounded balance of +23%
· Average prices are expected to be broadly unchanged over the next quarter, with 9% companies expecting an increase and 9% expecting a decrease, giving a rounded balance of +1%
· 15% of businesses reported stocks as more than adequate to meet demand, and 5% less than adequate, leaving a balance of +10%.