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GB: CBI Industrial Trends
| Actual | Previous | |
| Orders Balance | -38% | -27% |
Highlights
The latest industrial trends survey reads less like a cyclical slowdown and more like a competitiveness shock unfolding in real time. Sentiment has deteriorated to pandemic-era lows, with firms simultaneously facing collapsing demand, rising costs, and eroding market position.
The contraction in output and orders is broad-based, but the sharper signal lies in expectations as firms anticipate an accelerated decline in new orders (minus 31 percent) and further output contraction. This forward-looking pessimism reflects a structural demand problem, not merely short-term volatility. The surge in firms operating below capacity (73 percent) reinforces this, indicating idle resources and weakening utilisation.
Cost dynamics are particularly concerning. Unit costs are rising at their fastest pace in over three years, while selling prices lag behindimplying a sustained margin squeeze. This is compounded by renewed supply-side frictions, with material constraints rising sharply and energy costs undermining industrial competitiveness.
The response from firms is defensive due to investment cuts across capital, skills, and innovation, alongside accelerated job shedding. This signals a negative feedback loop where weak demand suppresses investment, which in turn constrains future productivity and growth.
At its core, the UK manufacturing sector is confronting a dual shockexternal (geopolitics, supply chains) and domestic (energy costs, competitiveness)with policy credibility on industrial energy emerging as a decisive factor for stabilisation.
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