Engineering news
Output in the manufacturing sector was stable over the past quarter, but orders fell, according to the latest CBI quarterly Industrial Trends Survey.
Total new orders fell in the three months to April, matching the decline in the previous quarter, according to the survey of 472 manufacturers. The decline was driven by a dip in export orders, while domestic orders were flat.
Average input costs rose at the fastest pace in two years, but firms found it difficult to pass on increased costs, with both domestic and export prices continuing to fall.
Meanwhile, numbers employed in the manufacturing sector grew at a slightly stronger pace this quarter.
Both output and demand are expected to grow in coming months, with the latter underpinned by strong expectations for export orders. However, optimism about export prospects for the coming year has flat-lined.
Looking to the year ahead, manufacturers’ plans for investment in buildings (+6%) and in plant & machinery (+17%) have increased. However, plans for training and retraining fell.
Rain Newton-Smith, CBI director of economics, said: “Manufacturing has yet to pick-up after a flat start to the year, with falling orders providing little impetus for production. While expectations for the upcoming quarter are encouraging, manufacturers are still facing sizeable external headwinds.
“The falling exchange rate should give some support to manufacturers, and investment intentions are strong. With the expected pick-up in exports, it’s likely that firms will be looking to increase capacity.
“We need to continue to help manufacturers to export their products to markets across the globe. While businesses should take the lead, government also has a role to play through the advice provided by UKTI and our embassies.”
The CBI also published monthly figures for April, which showed that total order books improved slightly, with export order books strengthened to their highest since August 2015 to -13%.