Growth in manufacturing output accelerated in the three months to November according to the latest monthly CBI Industrial Trends Survey.
Order books also continued to fill up. Total orders were, by a small margin, the strongest since August 1988, while export order books were the joint highest in more than 20 years.
The improvement in total order books was particularly marked in food & drink and chemicals, while export order books strengthened notably in chemicals, electronics and transport goods.
Output is expected to continue expanding in the three months to February, although at a more moderate pace.
Stocks were broadly adequate in the quarter to November, though the level of stocks was below the long-run average.
Expectations for price inflation were similar to recent months, around average.
Anna Leach, CBI Head of Economic Intelligence, said:
“UK manufacturers are once more performing strongly as global growth and the lower level of sterling continue to support demand. Output growth has picked up again, and export order books match the highest in more than 20 years.
“Nonetheless, uncertainty continues to hold back investment and cost pressures remain strong. Manufacturers will be hoping the Budget brings some relief from the business rates burden in particular.”
- 28% of manufacturers reported total order books to be above normal, and 11% said they were below normal, giving a balance of +17%
- 26% of firms said their export order books were above normal, and 6% said they were below normal, giving a rounded balance of +20% well above the long-run average of -18% (matched the previous series high in June 1995).
- 40% of businesses said the volume of output over the past three months was up, and 12% said it was down, giving a balance of 28% above the long-run average of +4%
- Manufacturers expect output to growth to accelerate in the coming quarter, with 27% predicting volumes to increase, and 14% expecting a decline, giving a rounded balance of +13%
- 19% of companies expect average selling prices to increase in the coming three months, with only 2% predicting a decline, giving a balance of +17% – significantly above the long-run average of +2%
- 12% of firms said their present stocks of finished goods are more than adequate, whilst 10% said they were less than adequate, giving a balance of +2% – below the long-run average (+13%)
The survey was conducted between 26th October and 14th November. 397 manufacturers responded.
Source: CBI, 21st November 2017