Factory orders slump to lowest level since early 2021 - CBI
Manufacturing output fell sharply in November, industry data showed on Wednesday, as orders slid to their lowest level in nearly three years.
According the latest monthly Industrial Trends Survey from the Confederation of British Industry, output volumes in the three months to November had a balance of -17, a sharp decline on October’s balance of -6.
A balance is the weighted percentage of companies reporting an increase minus those reporting a decrease.
Output was down across ten of the 17 sub-sectors, the CBI noted, with chemicals, mechanical engineering, metal products and metal manufacture the worst affected.
Output was also expected to continue falling into 2024.
Total order books, meanwhile, were reported as being below normal for the time of year, with a balance of -35 compared to October’s -26. Analysts had been expecting the balance to improve marginally, to -23.
"This leaves the level of order books below the long-run average - 13% - and at their weakest since January 2021," the CBI noted. The UK was in lockdown at the start of 2021.
Export order books were also seen as below normal, with the balance deteriorating to -31 from -23 a month previously. The weakest since February 2021, it was below the long-run average of -18.
Anna Leach, deputy chief economist at the CBI, said: "Manufacturing output has been under pressure recently, given the combination of slowing demand and the run-down of stocks of finished goods.
"This latest data will fuel concerns that the economy is slowing swiftly as the highest interest rates for 15 years take their toll on demand.
"The further softening of orders is a worry."
Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, said: "This looks like underlying weakness. Our seasonally-adjusted version of the orders balance fell to a 34-month low of -35 in November, from -20 in October.
"What’s more, the true picture may even be worse than the CBI survey suggests, given that it was closer to its long-run average than the orders balance of the S&P Global CIPS manufacturing PMI survey was in October.
"All told, we expect manufacturing output to fall by about 1% quarter-on-quarter in the fourth quarter."
The CBI's survey of 232 manufacturers was conducted between 25 October and 14 November.