| Actual | Previous | |
|---|---|---|
| Orders Balance | -32% | -37% |
Highlights
UK manufacturing ended the year under pressure, but with tentative signs that the pace of decline is easing. The industrial trends survey shows output volumes still falling in the three months to December, yet at a noticeably slower rate than in the previous quarter. This suggests that while contraction persists, the sharpest phase of the downturn may be passing. Expectations for the first quarter of 2026 point to a similar, rather than worsening, rate of decline.
Weak demand remains the central challenge. Order books, both domestic and export, improved slightly but continue to sit well below historical norms, signalling that recovery momentum is fragile and uneven across markets. The breadth of the slowdown is also striking, with output declining in almost all sub-sectors, led by chemicals, metal products, and mechanical engineering.
At the same time, inventory pressures are easing. Although stocks of finished goods remain more than adequate, the reduction from last month suggests some rebalancing between supply and demand. A notable development is the sharp rise in expectations for selling price inflation, now above the long-run average. This points to emerging cost pass-through pressures, raising the risk that manufacturers may face a difficult trade-off between protecting margins and sustaining already weak demand.
Weak demand remains the central challenge. Order books, both domestic and export, improved slightly but continue to sit well below historical norms, signalling that recovery momentum is fragile and uneven across markets. The breadth of the slowdown is also striking, with output declining in almost all sub-sectors, led by chemicals, metal products, and mechanical engineering.
At the same time, inventory pressures are easing. Although stocks of finished goods remain more than adequate, the reduction from last month suggests some rebalancing between supply and demand. A notable development is the sharp rise in expectations for selling price inflation, now above the long-run average. This points to emerging cost pass-through pressures, raising the risk that manufacturers may face a difficult trade-off between protecting margins and sustaining already weak demand.
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
