UK manufacturing output growth slumps to weakest level since May 2018, survey reveals

Manufacturing output growth in Britain over the past three months was at its weakest level since May 2018, with businesses pointing the finger at Brexit, a new survey has shown.

However, companies reported that their export order books grew compared to the three months to February and remain above the long term average, according to the latest industrial trends survey from the Confederation of British Industry (CBI).

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Yet the survey, which asked 358 manufacturers about the state of their businesses, found that total order books – meaning the number of domestic and export orders – weakened slightly in the three months to March compared to the three months to February.

In terms of output, mechanical engineering, paper, printing and media, and motor vehicles and transport equipment sub-sectors were the main drags on growth. The food, drink and tobacco, chemicals, and metal manufacture sub-sectors registered relatively strong growth rates.

A new question in the survey asked manufacturers how Brexit uncertainty was affecting them. A quarter of respondents reported stockpiling, while others mentioned uncertainty depressing investment and demand, and making it more difficult to obtain orders.

Anna Leach, head of economic intelligence at the CBI, said: “The manufacturing sector has slowed again this month and is now barely growing.”

“Brexit uncertainty is one of the biggest threats to growth in the UK manufacturing sector – both current and future – as firms prioritise stockpiling goods over investing in the future of their business,'' she said.

Group director of INEOS and chair of the CBI manufacturing council, Tom Crotty, said: “Manufacturers are in despair at the unacceptable failure of politicians to end the Brexit impasse.”

On the export growth revealed in the survey he said: “UK manufacturers continue to be supported by the lower level of sterling. However, the recent slowing in global economic momentum means that there will be less support for the UK manufacturing sector from external demand.”

Read more: Britain's trade gap widens as exports to EU fall

Earlier this month it was revealed by the Office for National Statistics (ONS) that Britain’s global trade in goods deficit had widened to £38bn. Despite an increase in exports, goods imports had grown further, causing the deficit to grow by £1.6bn with European Union countries and £0.8bn with non-EU countries.

Today’s CBI survey showed that manufacturers expect output to grow at a somewhat faster pace in the coming quarter, with 29 per cent predicting growth and 22 per cent a decline.