Manufacturers in the UK reported stable output volumes in the three months to June, following a previous uptick in the quarter to May, according to the latest Industrial Trends Survey by the Confederation of British Industry (CBI). Expectations are cautiously optimistic for a modest rise in output over the next three months.
Despite improvements in total order books compared to May, both total and export orders remained below normal levels and their long-run averages. Export orders, in particular, saw a significant decline to their lowest since February 2021, indicating ongoing challenges in international markets.
The survey of 248 manufacturers also highlighted expectations for increased selling price inflation over the coming months, surpassing the long-run average pace.
Ben Jones, CBI’s lead economist, noted a varied recovery across manufacturing sub-sectors, with sectors like food, drink & tobacco, and motor vehicles showing growth, while others struggled. Jones emphasized the importance of addressing soft order books, especially in exports, underscoring the need for a robust economic strategy from the incoming government to support sustainable growth, productivity improvements, and business investment.
Key priorities suggested by Jones include a comprehensive trade and investment strategy, a Net Zero Investment Plan, and enhanced support for automation and AI initiatives. Immediate focus on tax, planning, and skills policies is recommended to provide clarity and support for businesses navigating the economic landscape.