UK manufacturing downturn eases in August - CBI

The downturn in the UK manufacturing sector eased in the three months to August but orders books remain "severely depressed", according to a survey from the Confederation of British Industry out on Friday.

The CBI’s total orders balance came in at -44 in August, up from -46 in July but worse than analysts’ expectations for a balance of -34. Export order books improved slightly from July but remain far below their long-run average.

The survey found that output declined in 16 out of 17 sub-sectors, with the headline drop driven mainly by the mechanical engineering, food, drink & tobacco, and motor vehicles & transport equipment sub-sectors.

Looking ahead, manufacturers expect output to fall at a much slower pace in the next three months.

CBI deputy chief economist Anna Leach said: "This has been another difficult month for manufacturers. Activity continues to be poor and order books severely depressed, although the worst of the decline seems to be behind us.

"It is a relief to see the pressure on manufacturers starting to ease. As the sector looks to rebuild from the economic shock, the Government must consider additional ways to support this sector to help reinforce a recovery, such as grants and further business rates relief.

"As we head into the autumn months, a coherent plan to ensure the manufacturing sector is resilient to a potential second wave and to the challenge of adapting to a new trading relationship with the EU is vital."