The UK manufacturing sector remains under pressure due to weak demand, rising costs, and global uncertainties, which continue to weigh on performance. As a result, industrial trends have remained in negative territory at minus 30, three points up from the previous month. Output volumes were broadly flat, halting the steep decline seen earlier in the year. Nonetheless, the outlook for the next quarter is downbeat, with firms expecting a slight dip in production and continued contraction in both domestic and export orders.

Mounting cost pressures are squeezing margins, with input costs rising at the fastest pace since early 2023. Although firms raised prices domestically and abroad, these increases failed to keep pace with soaring costs, resulting in eroded profitability. Export competitiveness is deteriorating sharply, particularly outside the EU, amid Sterling appreciation, tariff changes, and longstanding trade frictions.

Confidence across the sector has weakened further, with business sentiment and export optimism both declining. Investment intentions remain subdued, as firms face uncertainty around future demand and labour shortages. The employment outlook is similarly negative, with staffing levels continuing to decline for the third consecutive quarter.

Without swift policy support, including a stable tax environment, skills reforms, and energy cost relief, UK manufacturing risks stagnation. The need for targeted government action in the Autumn Budget is becoming increasingly urgent.

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.

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