UK manufacturers’ order book balance improves marginally in August but remains considerably weak

The latest survey by the Confederation of British Industry (CBI) revealed on August the UK manufacturers' order books improved slightly in July but remained considerably weak by historical standards.

According to the report, the CBI's monthly factory order book balance increased to -44 in August from -46 in the previous month. This was the highest reading since March but remained well below the long-run average of -14. Economists had forecast the reading to come in at -35. Export order books (-60) strengthened slightly from July (-64) but continue to be far below their long-run average (-18).

The CBI also reported that output in the quarter to August (-46) declined sharply, although the pace moderated on July’s survey-record decline (-59). It is also expected that output will fall at a much slower pace in the next three months (-10). Meanwhile, output prices are seen to decline at a modest pace in the next three months (-5 from +4 in July).

“The survey results show some early signs of the manufacturing downturn bottoming out, but it is clear that many firms remain in distress and the sector looks set for a challenging Autumn,” noted Tom Crotty, Group Director at INEOS and Chair of the CBI Manufacturing Council. “As the government looks to economic recovery, it is crucial that it continues to support firms through the difficult months ahead, and work with us to build a more resilient manufacturing sector.”