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GB: CBI Industrial Trends
| Actual | Previous | |
| Orders Balance | -30% | -32% |
Highlights
UK manufacturing conditions remained severely constrained in the quarter to January, with falling output, weakening demand and subdued investment reinforcing a fragile operating environment. Production declined at a faster pace than in the previous quarter, driven by broad-based weakness across key sub-sectors including food and drink, metals, engineering and chemicals. Although optimism remained negative, sentiment was the least pessimistic since mid-2024, suggesting conditions may be stabilising rather than improving.
Order books deteriorated sharply, with total new orders contracting at their fastest rate since July 2020 as both domestic and export demand weakened. Capacity utilisation fell to its lowest level in nearly five years, reflecting persistent underuse of productive resources and declining stock levels. Employment continued to fall, while firms increasingly cited access to credit as a growing constraint, despite easing labour and materials shortages.
Cost pressures remained elevated, even as the pace of cost growth slowed. Rising wages, energy prices and taxes continued to compress margins, prompting expectations of renewed price inflation despite subdued demand. Investment intentions stayed weak, with firms planning cuts to capital spending and training due to uncertain demand and inadequate returns. Overall, the survey depicts a sector under sustained strain, balancing fragile demand conditions with intensifying cost pressures.
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