UK factories see output soften in June - CBI
British manufacturers continued to see output volumes fall in June, an industry survey showed on Wednesday.
According to the latest industrial trends survey from the Confederation of British Industry, output volumes had a weighted balance of -6% in June, although that was a marginal improvement on May’s -10%.
Output declined in 12 of the 17 sub-sectors, with mechanical engineering along with food, drink and tobacco seeing the biggest falls.
Total order books were also reported to be below normal, little changed at -15% from May’s -17%.
Output was, however, expected to rise slightly in the three months to September, with a balance of 4%.
Expectations for average selling price inflation in the coming quarter also fell slightly, to a balance of 19% from 21% in May. Although still well above the long-run average of 7%, it is the sixth consecutive fall and leaves expectations at their softest since February 2021.
Anna Leach, deputy chief economist at the CBI, said: “May marked another weak month for UK manufacturing, with activity declining for the fifth time in a row. Manufacturing activity is likely to have shrunk a little during the second quarter, as weak demand has overwhelmed some stabilisation in supply chains and costs.”
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “The survey suggests a material recovery in the manufacturing sector is still someway off. While the total orders balance edged above its average since January 1990, -16%, it is not seasonally adjusted and usually increases slightly in June.
“[The survey] provides some reassure that the rate of producer price output price inflation will continue to slow. Manufacturers also might be tempted to cut prices in order to reduce their excess stock that they accumulated last year.
“June’s survey therefore bolsters our view that the rate of increase in the core goods consumer price inflation will slow sharply in the second half of this year.”
The survey of 233 manufacturers was conducted between 25 May and 13 June. A balance is the weighted percentage of companies reporting an increase minus those reporting a decrease.