The latest CBI monthly Industrial Trends Survey, released on 8 December 2009, showed that 18 per cent of manufacturers anticipate that the volume of output will rise over the next three months, while 25 per cent think it will fall.
The balance is the most negative since July and is a setback to companies’ output expectations in the past two months’ surveys.
The number of manufacturers reporting that their order books were below normal was slightly lower than November and the least negative since December 2008. However, export order books weakened again, reversing part of the improvement seen in November.
Ian McCafferty, CBI chief economic adviser, said: ‘Manufacturing prospects were starting to look up but have dipped again in this latest survey. Output had been edging higher after the rapid stock depletion earlier this year. But with demand moving only slowly in the right direction, order books remain very weak and firms now expect production will fall back slightly in the next three months. This highlights the fragility of the recovery and the likelihood that economic activity will continue to bump along the bottom early next year.’
The adequacy of stocks fell back a little in December. The number of firms saying that stock levels are more than sufficient to meet demand is lower than in November.
Manufacturers expect that prices will fall in the next three months and the percentage of manufacturers expecting a fall this month will decrease in line with the previous two months.
The December 2009 CBI Industrial Trends Survey was conducted between 18 November and 2 December and included 504 manufacturers. During the survey period, the pound averaged €1.11 and $1.66, while Brent Crude averaged $77.87 per barrel, compared with €1.11 and $1.65 and $77.48 per barrel in the November survey period.
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