Orders up, but so are prices

Posted on 19 Jun 2008 by The Manufacturer

Manufacturers reported a rise in the order books in June, though output prices are likely to continue rising, according to the latest CBI Industrial Trends Survey.

A +1 per cent balance on orders was recorded as 31 per cent reported above normal levels and 30 per cent below. Export orders are also improving, registering -5 per cent in June compared with -12 per cent in April and May.

The good news did not extend to output prices however, which 39 per cent of firms said will rise in the next three months and only 10 per cent said will drop. Though the figurers were a slight improvement on May’s +30 per cent balance, that was the highest figure recorded since February 1995.

The figures add up to a cautiously optimistic outlook for manufacturing, the sector deemed to be surviving the best in the face of the credit crunch.

Ian McCafferty, chief economic adviser at CBI, said: “Manufacturing demand is holding up reasonably well. Manufacturers, especially those exposed to the global economy, have been less affected by the slow-down in domestic spending than other sectors.

“At the same time, however, there has been no let up from the impact of higher costs on manufacturers, and the CBI’s data shows firms still having to pass them on in higher prices.”