UK manufacturing output continued to fall in the three months to February, although at a slower pace than at the start of the year, according to the latest Industrial Trends Survey from the Confederation of British Industry, underscoring a sector still struggling to regain momentum.
The survey, based on responses from 305 manufacturers, found that output volumes declined at a weighted balance of -14 per cent in the three months to February, an improvement on the -25 per cent recorded in January. However, manufacturers expect production to contract again over the next quarter, with output forecast to fall at a broadly similar pace in the three months to May.
Weak demand remains a central concern. Total order books were reported as below “normal” in February, at -28 per cent, little changed from January and well below the long-run average of -14 per cent. Export orders also remained depressed, though the balance improved slightly to -26 per cent from -30 per cent in January, still weaker than the historical norm.
Output fell in 13 of the 17 manufacturing sub-sectors tracked by the survey, with the sharpest declines reported in metal products, food, drink and tobacco, and mechanical engineering. The breadth of the slowdown points to persistent caution among customers, both at home and overseas.
Cost pressures, meanwhile, remain elevated. Expectations for average selling price inflation stood at +26 per cent in February, marginally lower than the previous month but still more than three times the long-run average. At the same time, stocks of finished goods were reported as “more than adequate”, suggesting supply is continuing to outpace demand in parts of the sector.
Cameron Martin, senior economist at the CBI, said the easing in output declines offered some relief after a difficult start to the year but warned that confidence remained fragile. “Many firms continue to report customers holding back amid low confidence and elevated cost pressures,” he said.
He added that the government’s upcoming Spring Forecast represented a chance to shore up sentiment. Manufacturers, he said, were looking for faster delivery of the industrial strategy, action to address skills shortages and measures to lower the cost of doing business, particularly on energy.
“Tackling punitive energy costs would strengthen competitiveness, ease cost of living pressures and help lift demand across the economy,” Martin said.
The survey suggests that while the pace of decline has slowed, a sustained recovery in UK manufacturing remains elusive without policy support and a clearer improvement in demand conditions.
