Manufacturing order books suffer sharp drop
Manufacturing activity in October suffered a sharp drop amid high interest rates and uncertainty around the upcoming Budget, a new survey has found.
The Confederation of British Industry (CBI)’s latest industrial trends survey has shown that the total orders balance fell to minus 38.
The CBI said September’s figure showed a score of minus 28.
Confidence readings also deteriorated, with business expectations falling to minus 19 from minus six in July.
The jobs balance score for the next three months also worsened in further worrying signs for the UK labour market.
Analysts at Pantheon Macroeconomics suggested the survey pointed to a “consistent message of downbeat sentiment” across manufacturers in the UK.
“We fail to see a rapid turnaround materialising any time soon,” Elliott Jordan-Doak, a senior UK economist at Pantheon Macroeconomics, said.
“But actual output in the manufacturing sector has outperformed the survey-based signals for much of the year so far, and it appears that pessimism bottomed out earlier in the year according to both the CBI’s industrial trends survey and the [S&P Global] purchasing managers’ index (PMI).”
Manufacturing continues to struggle
Earlier this month, the PMI pointed to a “dearth” in export orders for a decline across UK industry.
The survey also showed that the sector had been hit by a cyber attack on Jaguar Land Rover, leaving several smaller firms which supply parts to the car company struggling
S&P Global will publish initial estimates for manufacturing and services output over October on Friday morning.
Economists have forecast a marginal 0.1 point improve to the flash PMI for manufacturing while services is expected to improve.
Some of the survey data has been reflected in official GDP statistics although economists point out that the CBI’s findings can often be more pessimistic.
In a recent publication, the Office for National Statistics (ONS) said production output had fallen by 0.3 per cent in the three months to August 2025.
Several firms have pointed the finger at higher costs and squeezed profits, with the Chancellor’s £25bn hike to employers’ national insurance contributions (NICs) adding to strains on margins.
High energy prices paid by industry has also hurt firms’ competitiveness. US manufacturers pay four times as much in energy than firms in the UK.