CBI report indicates economic boost to UK manufacturing

Similarly, pricing pressures are said to have eased following strong inflation during the first two quarters of this year.

Of the 510 manufacturers responding to the CBI’s August monthly Industrial Trends Survey, 29 per cent of firms described total orders as above normal and 29 per cent said they were below. The resulting balance of +1 per cent shows order books remain well above the long-term average of -18 per cent, and is an improvement on the previous month’s balance of -10 per cent.

While 24 per cent of firms said export order books were above normal, an equal 24 per cent said they were below. The resulting balance of 0 per cent compares with -8 per cent in July, and is also significantly above the long-term average (-21 per cent).

According to the CBI, expectations for growth in factory output over the coming quarter have picked up slightly. Thirty-one per cent of firms predict that production will rise in the next three months and 17 per cent anticipate that it will fall. While the resulting rounded balance of +13 per cent remains above the long-term average (+6 per cent), it represents a continuation of the broader trend of moderating expectations since April.

Pricing pressures are said to have eased in comparison with the first half of 2011 and remain fairly modest. Nineteen per cent of manufacturers predict they will raise output prices over the coming quarter and 10 per cent expect to lower prices. The resulting balance of +9 per cent is considerably lower than the much stronger expectations seen in the months prior to July.

Furthermore, a balance of +14 per cent of firms reported stock levels to be more than adequate, which is in line with the long-term average (+14 per cent), and is the highest balance since December 2009 (+15 per cent).