UK manufacturing industry order books in September rose to the highest level ever, while export order books also improved to their strongest since March 2019.
The country’s latest monthly CBI industrial trends survey indicated that total order books, in the survey conducted across 273 manufacturing firms improved further over the preceding month’s strong results.
Despite the impressive performance in the real sector, the survey findings showed that output growth in the three months for September slowed for the second month in a row.
By historical standards, 11 out of 17 sectors recorded a surge in output, with headline growth driven largely by the food, drink & tobacco sub-sector.
The survey also reflected that stock adequacy picked up slightly, but still remained close to last month’s record low and considerably below average.
Meanwhile, analysts’ expectations for output price growth in the coming quarter remain strong as activities in the real sector continue to pick as government sustains the COVID-19 pandemic control measures.
Commenting on the survey findings, CBI deputy chief economist, Anna Leach, said: “Today’s survey highlights how amidst a variety of supply challenges, companies are beginning to struggle to meet high demand.
“Despite close to half of manufacturers surveyed reporting order books above normal, output growth has slowed sharply, albeit remaining relatively robust. As well as skill and labour shortages, sharply increasing material costs and shortages of key components, producers now face rocketing energy prices.
“Current issues reinforce the need for Government to take a more active approach to gripping the economic recovery. That will mean working together with business to ease these critical supply challenges that are affecting manufacturing production across the UK and risk putting the brakes on the recovery.
“With pressure on energy supply set to increase in the colder months ahead, energy security is vital for ensuring that crucial parts of the supply chain are able to continue operating”, she added
In his remarks, group director at INEOS and chair of the CBI Manufacturing Council, Tom Crotty, said: “It is reassuring to see order books reaching new highs, but global supply chain issues and cost pressures are continuing to hold back the sector. It is important that these issues are addressed as a priority.
“Looking ahead, the Chancellor has an excellent opportunity at the upcoming Spending Review to give manufacturing a shot in the arm and enable it to be a powerful engine for the UK’s economic growth and renewal.
“Firms will be looking for decisive action, be that an overhaul of the outdated business rates system, reform of the Apprenticeship Levy or bold public support for emerging industries and new technology”, the industrial expert stressed.
