UK manufacturers’ order book balance drops to lowest level since October 1981 in May

The latest survey by the Confederation of British Industry (CBI) revealed on Thursday the UK manufacturers' order books deteriorated further in May.

According to the report, the CBI's monthly factory order book balance fell to -62 in May from -56 in the previous month. That was the lowest reading since October 1981. Economists had forecast the reading to come in at -59. Export order books dropped to their lowest since October 1998 (-55 from -49 in April).

The CBI also reported that output in the quarter to May (-54 from -21 in April) fell at the fastest pace on record since 1975 and is expected to decline at a slightly slower pace in the next three months (-49). Meanwhile, the average selling prices for the next three months (-20 from -11 in April) are expected to decrease at the fastest pace since April 2009.

Anna Leach, CBI Deputy Chief Economist, noted: “These results show that UK manufacturers are still grappling with the impact of the pandemic. Production levels have fallen even more sharply as firms experience collapsing demand and supply chain disruption, leading some to temporarily shut down their factories. The sector is bracing for what will be a challenging period.”