Search Share Prices
Factory orders weaken but stay above trend, CBI says
Factory order books weakened in March but manufacturers continued to benefit from sterling's decline and global economic growth, a CBI survey showed on Wednesday.
The business group's poll of 381 manufacturers found 29% said total order books were above normal in the three months to March and 25% were below normal. The +4% balance was lower than a month before but well ahead of the negative long-run average of -14%.
Export order books were unchanged and exceeded the long-run average. Output slowed but the balance of +16% outstripped the long run average of +4%.
Britain's manufacturers have gained from the Brexit vote, which has weakened the pound and made their goods more competitive in international markets. Exporters are also benefiting from global growth that is forecast to remain strong for the next two years.
Output growth was broad-based with increases in 14 of 17 sub-sectors. Expansion was strongest for motor vehicle and transport equipment, chemicals and electronic engineering but growth is set to slow over the next three months, the survey found.
Anna Leach, the CBI's head of economic intelligence, said: "Robust global growth and the low pound have gifted UK manufacturers a strong first quarter in 2018. Although total order books and output growth slipped relative to February, demand and output growth remain well ahead of long-run averages."
Leach said manufacturers' confidence has received a boost from the agreement of a transition deal between the UK and the EU on 19 March but she said managers needed further clarity on the shape of UK-EU relations after Brexit.
"Other hurdles on the Brexit path need to be cleared in the same spirit - this includes a speedy agreement of a mutually beneficial trade deal for both the UK and the EU, with a customs union one of the options on the table."