Manufacturing woes deepen as output falls again
The struggles afflicting Britain’s ailing manufacturing sector show no sign of reversing according to a closely watched poll, with industry participants reporting output volumes and order books had both continued to fall.
According to the latest CBI industrial trends survey, production from the UK manufacturing sector fell by a weighted balance of 14 per cent in the three months to February, off the back of a faster period of deceleration the preceding quarter.
Output volumes dropped in 13 of the 17 subsectors polled by the industry body, with metal products, food and drink, and tobacco all facing an especially challenging three-months of trading.
Manufacturing bosses also expect output volumes to fall at a similar pace over the coming three months, as longstanding pressures from sky-high energy costs and a difficult international trade environment show little sign of abating.
The analysis, which surveyed over 300 of the UK’s largest manufacturers, found a majority of firms reporting total order books being “below normal” in February. Respondents also reported export orders to be down, though at a slower pace to the previous survey in January.
“The downturn in manufacturing output eased in February, after a downbeat period around the turn of the year,” said Cameron Martin, the CBI’s senior economist. “However, many firms continue to report customers holding back amid low confidence and elevated cost pressures.”
Manufacturing buckles under energy prices
Britain’s moribund manufacturing industry have spent much of the past year battling against a confluence of headwinds, driven by a highly unpredictable trading environment, cost inflation and energy prices.
The energy-intensive sector faces some of the industrial electricity prices in the developed world, which has led industry body Make UK call for green levies to be axed from all manufacturers’ energy bills.
Simultaneously, exporters – like Britain’s large carmaking sector – have been forced to content with a highly unpredictable trade environment, largely wrought by Donald Trump’s capricious tariff-making and signs the European Union plans to adopt a more protectionist approach to trade.
The CBI’s Martin singled out the government’s upcoming spring statement as a key milestone for ministers to “restore confidence” among sector participants.
“Manufacturers want to see the government focused on accelerating industrial strategy delivery, addressing skills shortages, and lowering the cost of doing business by bringing forward energy costs support.
“Tackling punitive energy costs will strengthen competitiveness, ease cost of living pressures, and help boost demand across the economy.”