Outlook weakens for UK manufacturers - CBI

Manufacturers are braced for a tough winter, a closely-watched industry survey showed on Wednesday, after output softened.

According to the latest CBI Accenture Industrial Trends Survey, output in the three months to September continued to fall, with a balance of -4%, a marginal improvement on August’s rate of -7%.

A balance is the weighted percentage of respondents seeing an increase minus those reporting a decrease

Output was down in eight of the 17 sub-sectors, with the biggest fall seen in food, drink and tobacco. Much of the decline was offset by strong growth in motor vehicles and transport equipment, however.

Order books were also stronger than expected, with a balance of -2%, up from -7% in August and ahead of analyst forecasts for around -11%.

But despite that, respondents still expect conditions to worsen throughout the rest of the year. The expected output balance slumped to -17% from -2% in August, the lowest since January 2021.

Selling prices are also expected to rise in the coming quarter, with a balance of 59% compared to 57% a month previously.

Anna Leach, deputy chief economist at the Confederation of British Industry, said: "It is clear that the downturn, which originated in consumer-facing services, has spread to manufacturing.

"When adding an uncertain demand environment to ongoing input and labour shortages, and a cost of doing business crisis, the outlook looks increasingly challenging for the sector."

The survey was carried out between 24 August and 14 September, with 238 manufacturing firms responding. Since then, however, the government has announced plans to halve energy bills for businesses during the winter months, with the CBI on Wednesday calling the package "a substantial short-term fix" for "hard-pressed businesses".