Factory order balances edged up from minus 23 per cent in October to minus 21 per cent for November, missing the minus 19 target expectation
UK manufacturers expect output to fall over the next three months while overall orders remain flat, a new survey from the Confederation of British Industry (CBI) suggests.
The CBI's latest monthly Industrial Trends Survey, compiled from responses from more than 400 manufacturers, shows just 19 per cent of firms expect order volumes to increase in the next three months with 28 per cent expecting orders to fall.
Factory order balances edged up from minus 23 per cent in October to minus 21 per cent for November, missing the minus 19 target expectation.
Export orders rose from minus 22 per cent in October to minus 12 per cent in November, largely as a result of an upturn in orders from the mechanical engineering, food, drink and tobacco and motor vehicles and transport equipment sub-sectors.
However chemicals, the largest export sector, reported a “sharp drop” in orders the CBI said.
This latest Industrial Trends Survey, giving an overall output balance at minus nine per cent, is the lowest prediction of the year so far and well below the long-run average of minus six per cent – the lowest figure since October 2011.
Just two sectors – motor vehicles and the transport equipment sub-sector – expect to report an increase in output.
And there was little change in the percentage of manufacturers expecting output prices to rise, with an overall balance of plus eight per cent in line with October's figure.
The food, drink & tobacco sector anticipates a sharp rise in output prices over the next three months – plus 42 per cent - though the CBI said this will be tempered by modest inflation expectations in other sectors.
Anna Leach, head of economic analysis at the CBI, said: “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.
“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.”