latest survey by the Confederation of British Industry (CBI) revealed on
Tuesday the UK manufacturers' order books continued to grow in June.
According to the report, the CBI's monthly factory order book balance increased to +19 in June from +17 in the previous month. This was the highest reading since May 1988 and was well above its long-run average of -14. Economists had forecast the reading to come in at +18. Meanwhile, export order books (-8 from -17 in May) improved to their strongest since April 2019 and were better than the long-run average (-18).
The CBI also reported that output volumes in the three months to June (+37 from +18 in May) grew at the fastest pace on record (since 1975). It was also expected that output will continue to expand at a quick, albeit a slightly slower, pace in the next three months (+33).
In other survey results, output price expectations for the next three months (+48 from +38 in May) heightened to their highest since January 1982. Stock adequacy (-10 from -6 in May) declined to its lowest level on record (since April 1977).
“The rebound in manufacturing activity has gathered pace in June, with output growth accelerating to its fastest pace on record and order books their strongest in over 30 years,” noted Anna Leach, CBI Deputy Chief Economist. “Encouragingly, this performance is reflected in the majority of manufacturing sub-sectors and looks set to continue in the coming quarter. However, supply shortages continue to bite, and firms expect that to push through into prices in the months ahead.”
Meanwhile, Tom Crotty, Group Director at INEOS and Chair of the CBI Manufacturing Council, said: “It is hugely reassuring to see the manufacturing sector performing well after a particularly difficult start to the year. There is a real sense of optimism from many in the sector that there are good times ahead. However, the picture is not all rosy, with firms continuing to face difficulties arising from supply chain disruption and cost pressures. Staff shortages are also causing issues for many manufacturing businesses across the country.”
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