UK manufacturers are anticipating a continued downturn in production over the next three months, according to the latest quarterly Industrial Trends Survey released by the Confederation of British Industry (CBI) on Thursday.
Following a significant decline in output volumes during the quarter ending January—a decrease considered the sharpest in four years as observed in December—the survey reveals a weighted balance drop from -25 percent to -13 percent. Forecasts for the upcoming period up to April indicate an expected further decrease in volumes, with the balance anticipated to fall to -19 percent.
Regarding order books, the balance registered at -20 percent for the quarter to January, down from -13 percent in the previous period. Manufacturers predict an accelerated decrease in orders, marking the steepest decline since the onset of the pandemic, with the index dropping to -32 percent from -11 percent recorded in October.
Business sentiment has notably deteriorated, experiencing the most rapid decline since October 2022, with the sentiment index plunging from -24 percent in October to -47 percent. Additionally, optimism regarding exports for the upcoming year has waned sharply, and investment intentions have shown a marked downturn since last October. Concerns over uncertain demand are cited by manufacturers as the primary impediment to investment.
The survey also highlighted a more rapid increase in average costs during the quarter to January, with a rise in the balance from 25 percent in October to 43 percent. A net 58 percent of respondents expect costs to continue rising in the coming quarter.
This survey was conducted from December 19 to January 13 and included responses from 343 manufacturing firms.
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