The latest CBI Industrial Trends Survey reveals a steeper decline in the UK manufacturing output volumes for the three months leading up to March, with firms reporting stable order books and slight improvements in export orders. Conditions remain subdued overall, with caution around capital investments due to anticipated increases in National Insurance and minimum wage. Although expectations for output remain less grim than earlier in the year, manufacturers are still holding back, indicating a need for government measures to stimulate growth and confidence in the sector.
Conditions in the UK's manufacturing sector remain subdued. Although there are some pockets of strength, notably in the aerospace and defence sectors, many firms continue to report that their order books remain weak.
Manufacturers responding to the survey reported that customers are generally nervous about proceeding with capital investments and are conserving funds ahead of upcoming increases to National Insurance and minimum wages, leading orders to be cancelled or at least delayed until later in the year.
While output expectations are not as gloomy as at the turn of the year, the sector looks set to remain in a holding pattern in the short-term.
Next week's Spring Statement and continuing challenges to the public finances means a lot of the growth the country needs will have to come from the private sector.
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