CBI survey shows manufacturing decline sharpest since pandemic

Manufacturing output is falling at its fastest pace since the start of the pandemic, a new survey of businesses has found.

According to a survey of 220 manufacturers by the CBI in the three months to December, the decline was mainly driven by declines in output from the food, beverage, tobacco, paper and mechanical engineering sectors.

Business leaders said order books were not as full as usual and stocks of finished goods were insufficient, as they warned that prices of their goods and services would rise again in the next three months.

However, the pace of rise in prices will be slower than the record highs earlier this year. Inflation fell from 11.1 per cent in October to a 41-year high to 10.7 per cent in November as price hikes in petrol and diesel slowed.

Output volumes in the manufacturing sector came to a balance of minus 9 per cent in a sentiment survey, down from 18 per cent in the three months to November, according to the CBI, which represents businesses.

Survey responses are weighted by the company’s market share and the extent to which they said that metric rose or fell to produce an index level between -100 and 100, where 0 separates contraction from growth. does.

The amount of goods and services produced fell in 11 out of 17 sectors, evidence that the UK is entering recession this winter.

Inflation in selling prices is expected to rise over the next three months, with the index reading at 52 percent, up from 47 percent in the three months to November.

Separate research from S&P Global/CIPS showed factories produced less, exported less, employed fewer people and saw fewer new jobs last month.

The composite purchasing managers’ index improved slightly to 46.5 from October’s two-and-a-half-year low of 46.2. A reading below 50 constitutes a decrease in activity.

Anna Leach, deputy chief economist at the CBI, said: “The corrosive effect of high inflation on demand is increasingly evident, as manufacturing output contracted at the fastest pace in two years last quarter. While some global price pressures have eased in recent months, With cost and price inflation likely to remain very high in the near term, rising energy bills are a major concern for the makers.

Gabriella Dickens, UK senior economist at Pantheon Macroeconomics, said: “The outlook for next year remains grim. Demand for industrial goods is likely to be hit again in 2023, as government support for energy bills and high unemployment sink into the water.” The deficit reduces real income, as businesses are forced to consolidate costs.


title_words_as_hashtags

Weeo

Weeo

Leave a Reply

Your email address will not be published. Required fields are marked *