Export orders may be the saving grace for manufacturers during an imminent slowdown for the sector says the CBI, as their latest figures confirmed the bleak outlook laid out late last week by CIPS/Markit.
“Exports are helping to limit the slowdown in the manufacturing sector, boosted particularly by sterling’s weakness against the Euro,” said Peter Gutmann of Experian, which conducts surveys jointly with the CBI, “However, the near-term outlook for manufacturing still looks tough as the economy enters a precarious phase,” he added.
While orders in the North West and Northern Ireland actually rose last quarter, seven regions registered declines, with the Midlands suffering the biggest hit. Export orders were strong for most regions though, with only the North East and East Midlands reporting a fall in this bracket.
Overall output across the country levelled out last quarter according to the CBI, as it told a slightly brighter tale than CIPS, though a fall in activity will ensue over the next three months, it warned.
“Manufacturing confidence has tumbled over the past quarter,” said CBI head of economic analysis, Lai Wah Co, “The climb in oil and other raw material prices over recent months has driven costs up significantly. Although firms are having some success in passing these costs on, profits are still under pressure.”
The CBI reported diverged from CIPS’ in employment statistics, stating that though they had fallen, it was at the slowest rate since 2001after new jobs in Wales and the East Midlands staved off the fall.
Most regions will cut investments over the next three months, with only Wales committing more funds, according to the report.