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Momentum remains strong in manufacturing sector

18 December 2013

Growth in the UK’s manufacturing sector has continued to strengthen with order books and output touching an 18 year high for the second consecutive month, according to the latest CBI Industrial Trends Survey. 

A survey of nearly 400 manufacturers found that both the size of total order books and the pace of output growth over the past three months were once again the highest recorded since 1995. Export orders also rose considerably, reaching their strongest level for 22 months.

Manufacturers expect output growth to continue over the coming three months although at a somewhat slower pace.

Stephen Gifford, CBI director of economics, (pictured) said: “The manufacturing sector is showing further signs of momentum with nearly all sectors reporting growth for a second month. Total order books and output growth have maintained the strong performance from last month, while export orders have also shown an encouraging upturn in fortunes. While risks remain in the Eurozone and beyond, this survey provides further evidence that the recovery is becoming more embedded.”

Key findings:

  • 35% of firms reported that total order books were above normal in December and 23% said they were below, giving a balance of +12%, the highest balance since February 1995 (+13%)
  • 34% reported that export order books were above normal in December and 23% that they were below, giving a balance of +11%, well above the long-run average of -20%
  • Growth in the volume of output in the three months to December was unchanged from the three months to November, when it was at its fastest rate since January 1995 (+29% balance), with 50% reporting it had gone up and 21% down 
  • Firms expect output growth to continue at a firm but somewhat slower pace in the next three months: 35% expect to raise output and 19% expect to reduce output, giving a balance of +16%
  • Output price expectations (+11%) rose to the highest level since February 2013 (+20%), with 20% stating average prices at which domestic orders are booked were up and 9% down
  • Stock adequacy of finished goods (+8%) was below average (+14%) for the fourth consecutive month.

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