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Manufacturing Industry bolstered by exports - latest CBI survey

Manufacturing Industry bolstered by exports - latest CBI survey

Added to MTDCNC by MTDCNC on 25 August 2016

The UK's manufacturing output grew while total orders remained solid, according to the latest CBI monthly Industrial Trends Survey. The latest survey of 505 companies found that export order books reached a two-year high, suggesting that the depreciation of sterling since the end of last year may be feeding through to stronger overseas demand.

Manufacturers in the chemical sector accounted for just over half the improvement in export orders with less than one-third of the 17 manufacturing sub-sectors reporting export orders at below normal levels. Despite the improvement in exports, total order books mainly stayed unchanged, yet remained comfortably above the long–run average. Output growth remained at a healthy pace.

Price expectations for the three months to November rose to their highest since February 2015, perhaps in response to the rise in the cost of imported raw materials following sterling’s depreciation.

The key findings from the latest survey showed that 19% of businesses reported total orders to be above normal whilst 21% of businesses reported export orders above normal. The study also showed that 34% of businesses reported a rise in output volumes and output growth is expected to remain steady over the next three months, with 30% companies expected a rise and 19% expecting a fall, leaving a balance of +11%.

The CBI's Head of Economic Analysis and Surveys, Anna Leach said: “It’s good to see manufacturing output growth coming in stronger than expected with signs that the fall in sterling is helping to bolster export orders. But the pound’s weakness is a double-edged sword, as it benefits exporters but also pushes up costs and prices.

“Manufacturers will welcome the new government’s focus on industrial strategy as well as the Chancellor’s recent guarantee over EU funding, which will help to provide certainty for universities and businesses investing in innovation and research and development.
“The most significant effects of the vote to leave the EU will flow over the medium to long-term. Therefore firms need to see ambitious decisions in the Autumn Statement that will secure the UK’s economic future as changes to trade, regulation and access to skills loom on the horizon.”

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