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GB: CBI Industrial Trends
| Actual | Previous | |
| Orders Balance | -32% | -9% |
Highlights
The UK manufacturing sector continues to face structural challenges, despite emerging signs of stabilisation. The total order book balance deteriorated from minus percent to minus 32 percent in October. The manufacturing output also declined in October, with the survey balance deteriorating to minus 10 percent from minus 4 percent in September. However, expectations of broadly stable production by January suggest a potential turning point following prolonged industrial weakness.
Demand remains fragile, with new orders recording a negative balance of minus 16 percent, while deteriorating competitiveness across domestic and international markets threatens export performance.
More concerning is the persistent divergence between production costs and selling prices. Cost pressures remained elevated at 60 percent, compared with domestic selling prices at 11 percent, indicating sustained pressure on manufacturers’ profitability and investment capacity.
Labour shortages have intensified, with 32 percent of manufacturers reporting skilled-worker constraints, substantially above the historical average of 17 percent. Consequently, investment intentions remain negative, potentially undermining future productivity growth.
Encouragingly, employment stabilised for the first time in two years, with modest recruitment anticipated. Consequently, stabilisation without investment-led productivity growth risks prolonging industrial stagnation. Targeted reductions in energy costs, workforce development and investment incentives will be essential to restoring manufacturing competitiveness.