British industrial orders growth slowed sharply in October to its weakest in six months amid rising raw materials’ prices and widespread labour shortages.
The Confederation of British Industry (CBI) in its Thursday report indicated that its monthly manufacturers’ order book balance fell to +9 in October from +22 in September, its lowest since April. The order book balance was well below the average forecast of +18 in a Reuters’ poll of economists.
According to Reuters, the quarterly CBI survey data showed domestic prices in the month undr review rose at the fastest pace since April 1980, while stocks of raw materials ebbed to the lowest on record.
The survey’s gauge of expected average unit costs – which add in wage bills – rose to its highest since April 1977.
Commenting on the factory order findings, CBI deputy chief economist, Anna Leach, said: “From higher material costs to labour shortages, manufacturers continue to face a number of serious global supply challenges hampering their ability to meet strong demand.”
The CBI report further showed that optimism about the overall business situation fell to +2 in October from +27 in July, its lowest since January when Britain’s economy had re-entered a COVID-19 lockdown.
However, the report reflected that short-term expectations for output growth remained buoyant, with October’s monthly balance of +33, the highest since July and well above the series’ long-term average of +8.
The CBI also reported that output over the past quarter was above average.
