Overseas demand for United Kingdom-made goods is continuing to recover, with export order books the least depressed since August 2008, according to a survey released March 18 by the Confederation of British Industry. But the business group warned that overall demand remains weak.
Of the 499 manufacturers responding to the CBI’s monthly Industrial Trends Survey in March, 22 percent said export orders were above normal and 40 percent said they were below normal. The resulting balance of minus-18 percent is an improvement on the previous month’s figure of -23 percent, and the highest since August 2008 (-9 percent).
Total order books remain depressed, reflecting the continued weakness of domestic demand. Fourteen percent of manufacturers said they were above normal, while 51 percent said they were below normal. The resulting balance of -37 percent is broadly unchanged from the previous two months.
With total orders still fragile, firms anticipate only a modest rise in production in the next three months. Twenty-five percent said they expected output to rise in the next quarter, and 20 percent anticipate a fall, giving a balance of +5 percent. That compares with +7 percent in February.
Price expectations are the highest since September 2008. The balance of 17 percent for March compares to 8 percent in January and February.
Ian McCafferty, CBI chief economic advisor, said: “Our survey shows that U.K. exports orders are steadily improving as global demand is starting to recover. Homegrown demand remains very weak, however, and as a result we can expect manufacturing output to grow only modestly for some time. Producer price inflation is expected to pick up further in coming months, to the fastest rate since autumn 2008. This reflects rising energy prices and increased import costs following Sterling’s decline, as manufacturers try to preserve their battered profit margins. Stock adequacy is the lowest since June 2007 (a balance of +5 percent) and below the survey average.”
The CBI is the U.K.'s leading business organization, speaking for some 240,000 businesses that together employ around a third of the private sector workforce. With offices across the U.K. as well as representation in Brussels, Washington, Beijing and Delhi, the CBI communicates the British business voice around the world.