In the latest industrial trends survey by the Confederation of British Industry (CBI), manufacturers reported a significant decline in output volumes for the three months leading up to November.
Contrary to expectations for expansion, production fell to -17%, down from -6% in the three months to October. The outlook remains grim as manufacturers anticipate a further decline in output by -7% in the quarter to February 2024.
The survey, based on responses from 232 manufacturers, identified a widespread downturn across the industry, with output falling in 10 out of 17 sub-sectors. The most substantial declines were observed in the chemicals, mechanical engineering, metal products, and metal manufacturing sub-sectors.
Adding to the concerns, order books reached their weakest level since the second COVID-19 lockdown in early 2021. Both total and export order books were reported as below normal in November, marking the most significant decline since January and February 2021, respectively.
These findings suggest a challenging economic landscape for the manufacturing sector, raising concerns about the trajectory of production and order books in the coming months.
Anna Leach, CBI deputy chief economist, said:
"Manufacturing output has been under pressure recently given the combination of slowing demand and the run-down of stocks of finished goods. This latest data will fuel concerns that the economy is slowing swiftly as the highest interest rates for 15 years take their toll on demand.
"The further softening in orders this month is a worry, with order books now in their weakest position since the start of 2021 when the economy was locked down amid the pandemic".
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