Manufacturing output hits two-year low

UK manufacturing output growth stalled in September – for the first time in two and a half years, according to new data out today.

In a survey conducted by the Confederation of British Industry, 26% of firms reported that output grew in the three months to September, while 25% said it decreased, giving a rounded balance of 0%, slightly below the long-run average of +3%.

The news came as total and export orders also deteriorated, the latter falling back to the lowest level in six months.

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According to the CBI Monthly Industrial Trends Survey, 7% of the 491 respondents said their order books were above average while 31% said they were below, giving a balance of -24%.

That was just below the long-run average (-20%) and a fall on a balance of -8% in August.

CBI director of Economics Rain Newton-Smith said: “Exports are the missing link in the UK recovery at the moment, with the strong pound squeezing manufacturers’ margins, even though lower commodity prices are helping to ease cost pressures.

“Meanwhile manufacturers will have an eye on China’s slowdown and its effect on neighbouring markets.

“Boosting our export performance, alongside innovation, are vital to improving productivity. That’s why businesses want the Government to protect export and innovation spending, alongside other growth-boosting areas, in the Comprehensive Spending Review.”

 

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