UK manufacturers’ order book balance improves slightly, but remains poor

The latest survey by the Confederation of British Industry (CBI) revealed on Monday the UK manufacturers' order books improved slightly in May but remained poor by historical standards.

According to the report, the CBI's monthly factory order book balance increased to -58 in May from -62 in the previous month. However, the reading remained well below a long-run average of -14. Export order books dropped to their lowest on record since April 1977 (to -79 from -55 in April).

The CBI also reported that output in the quarter to June fell at the fastest rate on record since July 1975 (to -57 from -54 in May), but is expected to decline at a slower pace in the next three months (-30). Meanwhile, average selling prices for the next three months are expected to fall at a slower pace (to -10 from -20 in May).

Anna Leach, CBI Deputy Chief Economist, noted: “The UK manufacturing sector remained in a deep downturn in June due to the ongoing COVID-19 crisis. Output volumes declined at a new record pace and export order books fell to an all-time low, reflecting the significant fall in demand in the UK and abroad. Firms are again hoping that this will ease somewhat in the next three months.”