UK manufacturing sentiment drops in Oct; output volumes fall: CBI

Manufacturing output volumes fell over the quarter to October, though less rapidly than in the quarter to September. Output is expected to be broadly unchanged over the next three months.

Total new orders fell in the quarter to October, reflecting the sharpest decline in domestic orders since July 2020, as well as lower export orders.

A further decline in new orders is expected, with over two thirds of respondents citing the strength of order books as a factor likely to limit output over the next three months, a CBI release said.

Manufacturers expect domestic orders to fall again over the next three months, while export orders are anticipated to be unchanged.

Pressures on costs and prices have diminished compared to July. Growth in average costs eased to its slowest pace in four years in the quarter to October, with a similar increase expected in the coming quarter.

Domestic and export selling price inflation has also eased, with the latter falling for the first time in four years. Overall selling prices are expected to be stable in the three months to January.

The outlook for hiring and investment remains subdued. Manufacturing headcount actually rose for the first time in over a year over the past quarter, but numbers employed are expected to remain unchanged over the coming quarter.

Meanwhile, investment intentions for the year ahead have weakened across the board.

Stocks of raw materials rose marginally by 4 per cent in the quarter to October, while stocks of both work in progress (plus 1 per cent) and of finished goods (plus 1 per cent) were broadly stable.

Manufacturers expect stocks of work in progress, of finished goods and of raw materials to be broadly unchanged in the next three months.

Fibre2Fashion News Desk (DS)