Activity in the manufacturing sector remained broadly steady in March, according to the CBI’s latest Industrial Trends Survey.
Output has been growing at a decent pace since last August, and despite easing slightly from the previous month, remained above average in March. Manufacturers expect to ramp up production even further in the next three months, just short of February’s robust prediction.
The survey of 468 manufacturers found that total order books climbed down a little from February’s six month high, but remained well above average, with fifteen of the survey’s eighteen sub-sectors reporting stronger than average orders.
Export orders weakened significantly from February’s half year high, falling below their long-run average.
Rain Newton-Smith, CBI Director of Economics, said:
“Sluggish export performance seems to be a headache that won’t go away, with a still subdued Eurozone and headwinds from a stronger pound. But measures in the Budget to support exporters should be a welcome boost for the sector’s longer-term prospects.
“With emerging markets facing a tough time and uncertainty continuing to hang over the Eurozone, firms are having to work even harder for opportunities to sell their products and services around the world.”
• 32% of firms said the volume of output over the past three months was up and 22% said it was down, giving a rounded balance of +11%. This was above the historical average (+3%)
• Businesses expect output to grow in the coming quarter, with 34% predicting growth, and 12% a decline, giving a balance of +22%. This edged down on February’s expectation (+25%), but remained well above the long-run average (+7%)
• 22% of firms reported total order books were above normal, and 22% said they were below normal, giving a balance of 0%, well above the average (-16%)
• 10% of businesses said their export order books were above normal, and 35% said they were below normal, giving a rounded balance of -26%. This was a bit below the average (-20%)
• Output price inflation expectations for the next quarter eased (+4%) on February’s ten month high (+8%)
• 17% of firms said their present stocks of finished goods were more than adequate, and 5% reported they were less than adequate, giving a rounded balance of +13%.