The latest Industrial Trends Survey, which interviewed 450 UK businesses, shows manufacturing orders are on the increase, but there was less demand for export orders, although they do remain above average.
Manufacturers were also positive about the prospects for output, with 38 per cent expecting it to grow over the course of the next quarter, however, average selling prices are in for a sharp increase during the next quarter to +19, according to the CBI.
Order book balance and output volumes
The order book balance is now at minus 3, which is a notable improvement on October’s figures of minus 17. However, output volumes also slowed in the last quarter.
Rain Newton Smith, chief economist for the CBI, said:
“It’s good to see manufacturers’ overall order books at healthy levels, and the outlook for output growth remaining robust as we head into Christmas.
“But the weak pound is beginning to make its mark, and prices are expected to rise, especially in the food and drink sector. On the flip side though, export orders remain above average.
The announcement of the new Productivity Fund was welcomed by the CBI, the EEF and the Food and Drink Federation; it is hoped some of the measures outlined in the Autumn Statement will give businesses the confidence to invest.
The £23 billion Productivity Fund will mean additional support for innovation and science, which the EEF say is “vital if we are to be at the forefront of the fourth industrial revolution”. The increased support for exports also received approval.
Rising food prices
The weak pound and the rising cost of ingredients has caused problems in the food and drink sector. It is predicted that prices of well-known food brands will rise in the coming months, however, some manufacturers say they will cover these additional costs where they can.
After Philip Hammond’s statement Autumn Statement, the Food and Drink Federation (FDF) issued a statement detailing just how important food and drink manufacturing is to the economy in the UK, with a worth of more than £21 billion.
Strong export growth for food and drink sector
The food and drink sector also showed strong export growth in recent months. The FDF say exports increased by 13.7 per cent, and crucially, non-EU exports grew at twice their usual rate in the last quarter.
The FDF also said branded food and drink exports are at record levels.