23 August 2010

Demand for UK-made goods continues to improve

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UK manufacturers saw demand for their goods continue to improve in August, as overseas orders returned to normal levels, the CBI said.

Responding to the latest CBI monthly Industrial Trends Survey, manufacturers said export order books strengthened, with 24 per cent reporting them to be above normal, and 24 per cent below normal. That gives a rounded balance of -1 per cent, compared with -12 per cent in the July survey.

Total orders were above normal for 21 per cent of manufacturers and 34 per cent said they were below. The resulting balance of -14 per cent is the highest since August 2008 (-13 per cent) and a slight improvement on July's balance of -16 per cent.

With overall demand for UK-made goods continuing to improve, manufacturers expect production to rise further over the next three months with 30 per cent predicting output will increase and 20 per cent anticipating a fall. The resulting balance of +10 per cent is an improvement on expectations in July (+6 per cent), with predictions for manufacturing production edging higher after weakening over the past two months.

But price pressures are ongoing within the manufacturing sector, with a balance of 11 per cent of firms expecting to raise prices, compared to +5 per cent in the previous survey.

Lai Wah Co, CBI head of economic analysis, said: "Prospects for the manufacturing sector remain very positive. Demand is steadily improving, helped by the revival of export orders after some weakness last month, and manufacturers expect slightly stronger production growth in the three months ahead."

Author
Michael Richards

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