UK manufacturers anticipate another significant drop in production over the next three months due to ongoing weak demand, according to the latest Industrial Trends Survey by the Confederation of British Industry (CBI) released on Wednesday.
In the fourth quarter, production volumes saw their steepest decline since August 2020, with the corresponding balance decreasing to -25% from November's -12%. A net 31% of manufacturers predict further decreases in output for the quarter ending in March.
The survey highlighted a decline in total order books, which dropped to -40% for the three months leading up to December from the previous period's -19%. Similarly, the balance for export order books sharply fell to -37% from -27%.
Manufacturers are projecting an increase in average selling prices for the quarter ending in December, with the indicator rising to 23% from 11%.
Ben Jones, CBI's Lead Economist, pointed out that manufacturers are currently facing a challenging combination of decreasing external demand due to political instability in certain European markets and uncertainty surrounding US trade policy. Concurrently, domestic business confidence has plummeted following the recent budget, which increased costs and led to numerous project cancellations and declining orders.
Looking ahead to 2025, manufacturers are bracing for continued difficulties without any expectation of a near-term recovery, noted Jones.
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