By Daniel Hunter

UK manufacturers expect to reduce output over the next three months, while overall orders are relatively flat, the CBI said today (Thursday).

Of the 409 manufacturers responding to the latest monthly Industrial Trends Survey, only 19% expect to increase their volume of output over the course of the next three months, while 28% expect it to fall.

The resulting balance of -9% marks the lowest prediction this year and is below the long-run average (+6%). The anticipated fall is broad-based, with only motor vehicles and the transport equipment sub-sector expecting to increase output.

The total order book (-21%) remained broadly flat this month and only slightly under the long-run average (-17%), although there was an upswing in export orders. The export order book (-12%) moved back above its long-run average (-21%), rebounding from last month’s low (-22%).

This upturn was driven predominantly by the mechanical engineering, food, drink & tobacco and motor vehicles and transport equipment sub-sectors. Chemicals — which represents the largest export sector in the survey — reported a sharp drop.

Stock levels remained stable after last month’s sharp fall at +5%.

The overall balance of +8% of firms expecting output prices to increase over the next three months changed little from October. The food, drink & tobacco sector anticipates a sharp rise in output prices over the next three months (+42% balance), but this is tempered by modest inflation expectations in other sectors.

“Overseas demand has improved in this month’s survey, but this has not been enough to lift overall demand and support the modest expectations for growth in production levels found in the previous survey," Anna Leach, CBI Head of Economic Analysis, said.

“Business confidence continues to be undermined by uncertainty over events in Europe and the fast approaching US fiscal cliff. However, we expect UK growth to pick-up somewhat in 2013 as this uncertainty gradually subsides and global growth increases.”

Join us on
Follow @freshbusiness