Engineering news
Activity in the manufacturing sector picked up pace in February, and output is expected to grow faster still in the next three months, according to the latest CBI Industrial Trends Survey.
The survey of 522 manufacturers found that 40% of firms said the volume of output over the past three months was up and 23% said it was down, giving a balance of +17%. This brought the pace of growth to levels last seen in mid-2014. The CBI found 16 of the 18 sectors anticipate growth in the coming quarter.
A majority of businesses expect output to grow in the coming quarter, with 36% predicting growth, and 12% a decline, giving a rounded balance of +25%.
The survey found that 26% of manufacturers reported total order books to be above normal and 16% said they were below normal, giving a balance of +10% - a six month high.
A total of 13% of businesses said their export order books were above normal, and 21% below normal, giving a balance of -8%. Although remaining weaker than domestic orders, they were above the historical average of -20%, and at their highest level since August 2014 (-3%).
Output price inflation expectations for the next quarter (+8%) rose to their highest since April 2014 (+9%). The food and drink sector is the largest contributor to the expected price growth, 14% of firms said their present stocks of finished goods are more than adequate, while 8% said they were less than adequate, giving a rounded balance of +5%.
Rain Newton-Smith, CBI economics director, said: “Our manufacturers have more of a spring in their step this month, regaining some of the momentum lost towards the end of last year.
“The drop in oil prices is good news for the manufacturing sector in the UK, bringing with it lower operating costs, but North Sea producers are clearly suffering.
“Export orders picked up significantly, to a level not seen for six months, but uncertainty over prospects in the eurozone will continue to weigh on export demand. So, it’s imperative we continue to help manufacturers sell their products and services into high-growth markets around the globe.”
The survey was conducted between 27 January and 16 February.