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March 2023 - Industrial

Manufacturing output volumes fell at their fastest pace since September 2020: The CBI’s latest Industrial Trends Survey has revealed that in the three months ro February 2023, manufacturing outputs fell at their fastest pace since September 2020 (weighted balance of -16%, from -1% in the three months to January). This lands as a huge disappointment given that outputs were expected to rise (+19%).

The survey is conducted each quarter with the latest research based on feedback from 280 UK manufacturing companies.

Outputs fell in 11 sectors out of the 17 monitored, with the decrease in outputs largely driven by the motor vehicles & transport equipment, chemicals and paper, printing & media sectors.

In addition, expectations for selling price inflation were at their lowest since May 2021 (+40%, from +41% in January) following a steady decline from the highs seen in early 2022 (+80% in March 2022). However, expectations for selling price inflation still remained above the long-run average (+6%).

When it comes to total order books, the survey found that these were reported as below normal in the latest data (-16% from -17% in January), which was roughly in line with the long-run average (-13%).

Also revealed as at below normal levels were export order books (-27%) a fall from -22% in January. Both these figures are below the long-run average (-18%).

Anna Leach, CBI Deputy Chief Economist, said: “Conditions in manufacturing remain challenging, with output disappointing and order books having thinned out since late last year. However, if growth is going to return to the sector on a sustainable basis, then manufacturers need more than the boost some will receive from lower energy prices over the winter season."

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