The CBI’s Industrial Trends Survey for September showed some recovering health in manufacturing order books but reflected lack of confidence in future growth prosects.
Twenty eight per cent of the 425 manufacturers who took part in the monthly survey from the CBI said they expect their output to rise in the last quarter of the year. Twenty one per cent said they think it will fall.
The CBI was positive about this outcome, coming as it does on the heels of disappointing PMI and output figures in August. Levels of orders are now reported to be back in line with July’s results and export orders had a significant role to play in this.
Anna Leach, CBI Head of Economic Analysis, said that manufacturers in the food and drink and chemicals sectors were the most positive about the outlook to the end of 2012.
Uncertainty and lack of appetite for risk have seen stock levels rise to their highest level since October 2011 however, and Ms Leach said that, “uncertainty is expected to build through the autumn – with key decisions to be made in the eurozone and the approach of the US fiscal cliff – meaning that conditions are likely to remain difficult for UK manufacturers.”
With growth prospect remaining weak, Lynn Tomkins, UK operations director at Semta, the sector skills council for science, engineering and manufacturing technologies urged manufacturers to consolidate their skills base and improve their capability to take advantage of what propects are available.
“Currently 363,000 of the technical workforce are qualified below world class standards and need to be upskilled,” observed Ms Tomkins. “There is unprecedented support for employers to recruit and develop the skills they need for now and for the future.”
Ms Tomkins emphasized that this support spans many different level of skills, from technician level to post graduate.
Prospect for the job market in the CBI survey looked bleak however. The report predicted that UK unemployment will rise to 8.4% in 2013 compared to a current level of 8.1%.
Economists at Institute of Chartered Accountants (ICAEW) are particualrly downcast about the economic environment. An ICAEW report, also released today, predicted that GDP will fall 0.5% beofre the new year.
The ICAEW executive director of members and operations, Robin Fieth, said: “As businesses are not confident about the future, they are reluctant to invest, reluctant to increase pay and are more cautious in their future aspirations.”