UK manufacturers’ order book balance improves more than expected in October

The latest survey by the Confederation of British Industry (CBI) revealed on Thursday the UK manufacturers' order books improved in October but remained far weaker than their long-run average.

According to the report, the CBI's monthly factory order book balance increased to -34 in October from -48 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 -45. Export order books (-46) also improved from September (-56) but continue to be far below their long-run average as well.

“Conditions remain tough in the manufacturing sector, with output and orders still down on the quarter, albeit to a lesser degree. The government must stay on the front foot when it comes to providing support for the sector and wider economy,” noted Rain Newton-Smith, CBI Chief Economist. “It is more crucial than ever for the government to listen to the experiences and concerns of businesses and ensure support matches the tightness of local lockdowns. Additionally, signing a trade deal with the EU would help create some clarity that firms so badly need during this fraught period.”

Meanwhile, Tom Crotty, Group Director at INEOS and Chair of the CBI Manufacturing Council, said: “While it is welcome to see a slightly rosier picture for manufacturing, there’s no escaping the fact that firms have endured another incredibly difficult quarter. The sector is not out of the woods yet and it will be important for the government to continue to support businesses as we approach the winter. Manufacturers will also be closely observing progress with Brexit negotiations as the deadline for a deal approaches. Manufacturing jobs, businesses and livelihoods are very much at stake and it is essential that leaders find a way through the current impasse and secure a deal.”