RECOVERY IN MANUFACTURING ORDER BOOKS PROMISING - CBI
Manufacturing order books recovered and the volume of output increased strongly in the three months to June, according to the latest monthly CBI Industrial Trends Survey.
According to the survey of 388 manufacturers, output grew at the fastest pace since December 2017 in the three months to June, broadly in line with expectations. Growth was broad-based, with output growing in 14 out of 17 sub-sectors, with growth mostly driven by “Food, Drink and Tobacco”, and “Mechanical Engineering”. Respondents anticipate that output growth will slow slightly over the next three months.
Total order books returned to the healthier levels recorded at the end of 2017, while export orders remained stable and well above average, in line with the past 16 months.
Expectations for output price inflation softened to the weakest in almost a year, while stocks levels moved back below the long-run average.
While we expect manufacturers to continue to benefit from robust external demand and the lower exchange rate, overall economic growth is expected to remain subdued due to weak consumer income growth and investment being held back by ongoing uncertainty.