Manufacturing industry sees growth in output increase to its fastest pace in last quarter of 2021

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14th January 2022 14:43 - Industrial

Manufacturing industry sees growth in output increase to its fastest pace in last quarter of 2021: A survey by the CBI has found that UK manufacturing output experienced a period of accelerated growth in the last quarter of the year to December 2021. 

The monthly Industrial Trends Survey polled 258 manufacturers, and revealed that they had recorded increased output in 15 out of 17 sub-sectors. Sectors seeing the greatest growth were food, drink and tobacco and motor vehicles and transport equipment. 

While the total order books in November hit a record high, December’s books were deemed to be ‘above normal’. Export orders in December were judged as broadly ‘normal’ although they had weakened slightly (-1% from +3% in November, and long-run average -18%).

Less promising were the reports of manufacturing firms' inventory positions, which saw a further deterioration in December. According to the research, stock adequacy of finished goods fell to a record low, following on from the record low seen in November (-24% from -16% in November).

Asking respondents about how they expect price pressures to continue in the future, the survey revealed they are expecting them to remain acute for the coming months.

Amongst the key findings in the latest survey, it was revealed that while output growth accelerated in the last quarter of 2021 for manufacturers (+29% from 17% in November), they expect to see output growth to ease in the next quarter (+23%). 

Anna Leach, CBI Deputy Chief Economist, said of the latest data:

“UK manufacturing demand remains strong, and output accelerated to meet this demand in December. However, behind the scenes, firms are battling pressures on a number of fronts.

“Stock adequacy of finished goods worsened to an all-time low for the second month in a row, and continued expectations for sharp price growth are a further challenge for the sector.

“The spread of the Omicron variant will have been a blow to business confidence. However, firms will welcome the Government’s decision to move from isolation to testing as a method of controlling the virus without unduly impacting their ability to operate.”



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