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GB: CBI Industrial Trends
| Actual | Previous | |
| Orders Balance | -41% | -38% |
Highlights
The latest industrial trends survey suggests that the UK manufacturing sector remains under considerable strain (minus 41, up from minus 38 the previous month), with output continuing its prolonged period of stagnation that has persisted since late 2022. Manufacturing volumes declined in May and are expected to fall further through August, signalling that the sector has yet to establish a sustained recovery.
The most concerning development is the deterioration in demand conditions. Total order books fell to their weakest level since September 2020, while export orders also weakened significantly, remaining below their long-run average. This points to subdued domestic and international demand, reflecting both fragile economic conditions and heightened global uncertainty.
At the same time, inflationary pressures are re-emerging. Expectations for selling price increases rose to their highest level since February 2023, suggesting that manufacturers are facing mounting input cost pressures. Rising energy costs and supply chain disruptions linked to geopolitical tensions in the Middle East appear to be exacerbating these challenges. While finished goods inventories remain broadly adequate, they are below historical norms, indicating limited buffer capacity should supply disruptions intensify.
Overall, the survey presents a challenging outlook for UK manufacturing. Weak demand, declining order books and rising cost pressures create a difficult operating environment, reinforcing the need for policies that reduce business costs, support exports and unlock investment to restore the sector's competitiveness and growth potential.
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