Outlook for UK manufacturing sector worst since Brexit vote - CBI

Sentiment in the UK manufacturing sector deteriorated a lot more than expected in January amid uncertainty over Brexit, according to the latest quarterly industrial trends survey from the Confederation of British Industry.

The CBI's monthly gauge of industrial orders fell to -1 this month from +8 in December, missing expectations for a reading of +5.

The gauge of manufacturing expectations declined to -23 in the three months to January from -16 in the period to October, marking its lowest level since July 2016. Meanwhile, optimism about export prospects for the year ahead deteriorated at the fastest pace since January 2009.

Manufacturing output continued to grow at an above-average pace in the three months to January. However, total orders were flat, with domestic orders steady and export orders recovering only slightly from a drop in October.

Anna Leach, head of economic intelligence at the CBI, said: "The manufacturing sector is clearly feeling the pinch of Brexit uncertainty, with worsening business sentiment coinciding with an ongoing reluctance to invest in new facilities, machinery, innovation and training. Notwithstanding continued growth in output, these underwhelming figures in part reflect businesses’ continuing desire for clarity.

"With uncertainty risking paralysis among manufacturers, it is vital for politicians to compromise and break the Brexit deadlock, paving the way for UK manufacturers to continue trading in global markets with minimal disruption."