UK factory activity stabilises in February, CBI says

Factory activity "stabilised somewhat" last month, according to one of the country's best-known business lobby groups, although a gauge of manufacturers´ order books worsened slightly.

The Confederation of British Industry´s total order books index slipped from -15% in January to -17% in February, as 12% of the companies surveyed said their order books were above normal and 29% said they were below.

That was worse than the -12% which economists had penciled in.

Commenting on the survey results, Rain Newton-Smith, CBI Director of Economics, said: "“Demand and output have remained relatively unchanged from January’s performance. The challenging outlook for the manufacturing sector has stabilised a little, with sterling having depreciated, but Britain’s manufacturers are still facing a difficult global situation."

Newton-Smith also called on the government to use next month´s Budget to tackle what it described as Britain´s outdated Business Rates regime and support investment by enhancing the scope of capital allowances.

A balance of 0% of firms said their production had increased over the past three months, although +11% forecast growth in the coming quarter.

Firms registered a slight improvement in their export performance, with a rounded balance of -19% reporting export order books were above normal.

Manufacturers were anticipating a marginal fall in average selling prices over the next three months, CBI said.