The latest CBI Industrial Trends Survey indicates that UK manufacturing output fell significantly in the quarter leading to June, matching the declines seen in May. Although most sectors experienced downturns, firms anticipate a slower decline moving forward. Both total and export order books are below normal, and stock adequacy has decreased slightly. Selling price inflation expectations have eased but remain higher than long-run averages. The survey, reflecting responses from 335 manufacturers, underscores the ongoing pressures of energy costs, labor costs, and skill shortages affecting the sector's performance as it navigates these challenges.
The steep decline in manufacturing output reflects the challenges faced by the sector, including high energy costs and rising labour costs, with expectations of slowing decline ahead.
Manufacturers reported output volumes fell sharply in the three months to June, driven primarily by declines in the chemicals, metal products, and mechanical engineering sub-sectors.
Total and export order books remain weak, with manufacturers indicating that both balances were broadly unchanged from the previous month and below long-run averages.
Ben Jones, CBI Lead Economist, highlighted that the manufacturing sector is grappling with significant pressures, from energy costs to skills shortages, impacting overall performance.
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