01 June 2010
Sign up to our newsletterWant more news like this? Sign up to our newsletter.

Manufacturing demand weakens but recovery is still on track

Overall demand for UK manufactured goods weakened a little in June, after a significant improvement in May, but total order book levels are still close to their long-term average, according to a Confederation of British Industry (CBI) survey.

Ian McCafferty, CBI Chief Economic Adviser, commented: "Although demand for UK-made goods has weakened a little this month, the manufacturing sector remains on a path of recovery, with conditions much improved on just a few months ago. UK exports continue to be boosted by the weak pound and strengthening world trade, firms still expect a healthy rise in production in the coming months and inflationary pressures look to be easing a little."

Responding to the latest CBI monthly Industrial Trends Survey, 19% of manufacturers said that total orders were above normal, while 42% said they were below. The resulting balance of -23% is down slightly on the figure in May (-18%), but does not reverse the improving trend of recent months, and the balance is still quite close to the long-term average (-18%).
Export order books were also a little weaker compared with last month. Nevertheless, the balance of -2% shows that export orders are still considered to be broadly normal. This follows last month's positive survey balance (+3%), the first since March 2008 (+3%), which was a considerable improvement on April this year (-16%).

Manufacturers still expect to raise output firmly during the next three months, with a net 15% expecting production to rise. This is broadly unchanged on May's balance of +17%, and is well above the long-term average of +5%.

Author
Paul Gay

Comments

Do you have any comments about this article?

Name
 
Email
 
Comments
 

Your comments/feedback may be edited prior to publishing. Not all entries will be published.
Please view our Terms and Conditions before leaving a comment.

Similar Articles