| Actual | Previous | |
|---|---|---|
| Orders Balance | -40% | -19% |
Highlights
The CBI's latest industrial trends survey paints a challenging landscape for UK manufacturers as output volumes fell sharply in the quarter to December, marking the steepest decline since mid-2020 (minus 25 percent). A significant drop is also anticipated in the coming months (minus 31 percent). Demand weakness has led to the sharpest deterioration in total (minus 40 percent) and export (minus 37 percent) order books since late 2020, with most sub-sectors-especially furniture, glass, and motor vehicles-experiencing notable contractions.
Despite falling demand, stocks of finished goods remain high, echoing early Covid-era levels (20 percent). This inventory build-up suggests manufacturers are struggling to align production with diminishing orders. Meanwhile, price pressures persist, with selling price inflation expectations (23 percent) far exceeding the long-run average (7 percent), signalling rising costs in the quarter ahead.
Overall, the data highlights a precarious mix of weak demand, oversupply, and mounting cost pressures. Manufacturers face an uphill task as they brace for continued output declines and navigate a volatile economic environment characterised by constrained global and domestic demand. Today's update leaves the UK RPI at 1 and the RPI-P at minus 1, meaning that economic activity in general is performing much as forecast.
Despite falling demand, stocks of finished goods remain high, echoing early Covid-era levels (20 percent). This inventory build-up suggests manufacturers are struggling to align production with diminishing orders. Meanwhile, price pressures persist, with selling price inflation expectations (23 percent) far exceeding the long-run average (7 percent), signalling rising costs in the quarter ahead.
Overall, the data highlights a precarious mix of weak demand, oversupply, and mounting cost pressures. Manufacturers face an uphill task as they brace for continued output declines and navigate a volatile economic environment characterised by constrained global and domestic demand. Today's update leaves the UK RPI at 1 and the RPI-P at minus 1, meaning that economic activity in general is performing much as forecast.
Definition
The Confederation of British Industry (CBI) produces a monthly survey (and a more detailed quarterly report) analysing the performance of UK manufacturing industry. This is the UK's longest running qualitative business tendency survey. Questions relate to domestic and export orders, stocks, price and output expectations with the main market focus being the domestic orders balance. The survey is seen as a loose leading indicator of the official industrial production data.
Description
Started in 1958, this is the UK's longest-running private sector qualitative business tendency survey. The survey is used by policy makers along with those in the business community, academics and top analysts in financial markets. One of its key strengths is that it is released within ten days and prior to official statistics and includes data not covered by official sources. It is never revised. The data are also used by the European Commission's harmonized business survey of EU countries.
Frequency
Monthly and quarterly
Frequency
Monthly and quarterly
