Manufacturing production edged downwards during the three months to October, marking the first decline in the last two years, according to the CBI Quarterly Industrial Trends Survey. Despite this, firms have signalled that they expect overall conditions to stabilise over the next quarter.
New export orders fell at the fastest pace in three years, possibly down to the continued strength of Sterling. Total new domestic orders reduced over the quarter for the first time since April 2013 and manufacturers’ optimism about both their business situation and export prospects for the year ahead fell to the greatest extent since October 2012.
Total unit costs stabilised over the three months to October, but output prices fell further and are expected to do so again over the next three months.
The 463 manufacturers surveyed predict that overall manufacturing conditions will stabilise in the next three months, with a small rise in output, although export new orders are expected to edge down slightly further.
Firms highlighted concerns about political and economic conditions abroad and their impact on export orders. Worries about price competition rose and the number of manufacturers citing uncertainty about demand as a constraint on investment was the highest in two years.