CBI manufacturing survey shows orders fall by 4%

By Gwen Ridler

- Last updated on GMT

Manufacturing firms reported stable output but a fall in orders
Manufacturing firms reported stable output but a fall in orders

Related tags Manufacturing

General manufacturing output remained stable over the past quarter, but orders fell, according to a survey from the Confederation of British Industry (CBI).

The survey of 472 UK firms – which included food and drink manufacturers – was conducted between March 23 and April 13. It revealed total new orders fell in the three months to April 2016, matching the decline in the previous quarter.

CBI director of economics Rain Newton-Smith said: “Manufacturing has yet to pick-up after a flat start to the year, with falling orders providing little impetus for production.

“While expectations for the upcoming quarter are encouraging, manufacturers are still facing sizeable external headwinds.”

Sizeable external headwinds’

Of the businesses surveyed, 21% reported a rise in total orders and 25% a fall, resulting in a 4% fall overall.

Average input costs rose at the fastest pace in two years, but firms found it difficult to pass on increased costs.

The CBI also found that manufacturers had high hopes for the next quarter, with 27% asked expecting total new orders to increase and 13% expecting them to decrease.

Newton-Smith said: “We need to continue to help manufacturers to export their products to markets across the globe.

“While businesses should take the lead, government also has a role to play through the advice provided by UK Trade and Investment and our embassies.”

Employment numbers up

A quarter of manufacturers said employment numbers were up, and 21% said they were down, while 23% expected employment to increase, and 21% predicted a fall in the next quarter.

Almost one third of manufacturers said that political and economic conditions abroad were a constraint on export orders in the coming three months, an increase from 25% last quarter.

Meanwhile, a CBI survey in March found that nearly  800 of its members agreed that remaning in Europe was “better for business, jobs and prosperity”.

CBI director general Carolyn Fairbairn said: “The message from our members is resounding – most want the UK to stay in the EU”.

For the CBI’s full report click here.

CBI manufacturing survey – at a glance

  • 21% of business surveyed reported a rise in total orders
  • 25% reported a fall
  • Overall, orders fell by 4%
  • Average input costs rose at the fastest pace in two years
  • Firms reported difficulties in passing on highter costs

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