Engineering news
British manufacturing continued to recover in the three months to April, but the pace of growth eased and export orders growth remained sluggish, according to latest statistics.
The CBI Quarterly Industrial Trends Survey of 468 firms found that 37% of businesses reported an increase in total new orders in the three month period, while 24% reported a decrease, giving a balance of +13%.
The survey found that 22% of firms reported a rise in output volumes, and 17% a decrease, giving a balance of +4%.
The study revealed that 23% of manufacturers said employment numbers were up, and 18% said they were down, giving a balance of +5%.
Meanwhile, manufacturers’ investment intentions for buildings, plant and machinery, product and process innovation, and training and retraining deteriorated compared to the previous 12 months.
The survey found that energy-intensive sectors enjoyed a strong quarter, reporting a fall in costs and prices, and a rise in output.
Separately, the CBI published monthly figures for April, which showed that total order books for manufacturers remained in line with normal levels. However, export orders were below par.
Looking ahead to the next quarter, 36% of manufacturers expect total new orders to increase, and 14% expect them to decrease, giving a balance of +22%, the highest since July 2014. A balance of +18% expect domestic orders to rise, and +12% expect new export orders to rise.
The survey found that 29% of firms anticipate a rise in output volumes in the next quarter, and 13% a fall, giving a balance of 16%.
While 19% of manufacturers expect employment to increase, and 21% expect it to decrease, giving a balance of -2%.
Katja Hall, CBI deputy director-general, said: “It’s encouraging that our manufacturers are seeing - and expect to see - continued growth, with rates of expansion still above average.
“Exports keep dragging at the heels of growth: firms are finding the recent rise in the pound against the euro challenging, making them less competitive in Europe, while the unravelling situation in Greece is creating uncertainty.
“Among the measures business wants in the first 100 days of a new government, an ambitious, long-term export strategy must be a central element to keep growth on course.”
Chris Sumner, the managing director of robotics manufacturer FANUC UK, added: “Strong manufacturing growth will come as a boost to the government with only nine days until the election. Record-low inflation has stimulated domestic demand and in turn production growth.
“Overseas orders have slowed down amidst continued economic fragility in the eurozone. Whilst prevailing conditions constrain UK exports, a strong domestic market presents an opportunity to invest in product and process innovation. Recently, we have seen low input costs in the automotive and medical sectors result in increased production line technology investments. Businesses in these sectors are clearly making moves to boost competitive edge and output potential in preparation for healthier export markets,” Sumner added.