UK manufacturing registers sharp decline in August
By Benjamin Chiou
Date: Tuesday 22 Aug 2023
(Sharecast News) - UK manufacturers have experienced the worst rate of decline in output in nearly three years, according to the CBI's latest Industrial Trends Survey, with volumes falling in 15 out of 17 sub-sectors.
The CBI said the net percentage of companies reporting an increase in output volumes minus those reporting a decrease fell to -19% in the three months to August, compared with +3% in the three months to July - the sharpest decline since September 2020 - data revealed on Tuesday.
The CBI said the declines were driven by motor vehicles and transport equipment, mechanical engineering, paper, printing and media, and chemicals sub-sectors.
The net percentage of manufacturers reporting order books as 'normal' in August dropped to -15%, from -9% in July.
"With output volumes contracting at their fastest pace since the COVID-19 pandemic and order books deteriorating, this survey makes for gloomy reading for manufacturers," said Martin Sartorius, principal economist at CBI. "However, easing price pressures will bring some relief to many manufacturing firms and the broader economy."
Expectations for average selling price inflation were just +8%, in line with the long-run average of +7%. This was down from +18% in July and the lowest level since February 2021 - having fallen for the past eight months.
Sartorious said: "The weak outlook for manufacturing activity underlines the need to double-down on delivering sustainable growth. With fierce levels of international competition, the race is on for the UK Government to offer targeted incentives to attract green investment and support firms' decarbonisation efforts."
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