The latest monthly CBI Industrial Trends Survey of 371 manufacturers found strong overall order books were driven by motor vehicles and transport equipment, and mechanical engineering sectors, although the strength was broad-based with 14 out of 17 sub-sectors reporting that order books were above normal.
Meanwhile, export order books weakened slightly compared with November’s record levels, but remained strong, and output growth was steady at a brisk pace in the three months to December, at a rate that was far above the long-run average.
However, respondents still expect output growth to moderate over the next quarter. Manufacturers also expect output prices to rise at the fastest rate since June in the quarter ahead, while stock adequacy deteriorated to below its long-run average.
Says CBI’s head of economic intelligence Anna Leach: “As we head towards the end of 2017, UK manufacturers’ total order books remain at a near 30 high, with export order books remaining at their strongest since the mid-1990s.
“While the lower level of sterling continues to support exporters, cost pressures remain intense. Businesses will expect to see the government’s Industrial Strategy make rapid progress next year to support manufacturing and the wider economy in every corner of the UK.”
Key findings:
- 28% of manufacturers reported total order books to be above normal, and 11% below normal – giving a balance of +17%
- 28% of firms said their export order books were above normal, and 12% below normal – giving a balance of +16%
- 42% of businesses said the volume of output over the past three months was up, and 11% down – giving a rounded balance of +30%
- Manufacturers expect output growth to slow in the coming quarter, with 26% predicting volumes to increase, and 13% expecting a decline – giving a balance of +13%
- 29% of companies expect average selling prices to increase in the coming three months, with 6% predicting a decline – giving a balance of +23%
- 7% of firms said their present stocks of finished goods are more than adequate, while 10% said they were less than adequate – giving a balance of -3%
