UK manufacturers’ order book balance worsened slightly more than forecast in November

The latest survey by the Confederation of British Industry (CBI) revealed on Thursday the UK manufacturers' order books deteriorated in November and were far below their long-run average.

According to the report, the CBI's monthly factory order book balance decreased to -40 in October from -34 in the previous month and remained well below the long-run average of -14. Economists had forecast the reading to come in at -39. Export order books (-51) also fell from September (-46) and remain far below their long-run average (-18).

The CBI also reported that output volumes in the three months to November (-6) dropped at the slowest pace since September 2019. However, it was expected that output would fall at a slightly quicker pace in the next three months (-10), marking a worsening in expectations compared to last month’s survey (+15). In addition, manufacturers forecast output prices to decline in the next three months (-8 from +4 in October).

“Output volumes have declined at their slowest pace in over a year in our November survey. But order books have softened again as global demand has been hit by intensified lockdowns, and manufacturers have trimmed their expectations”, noted Anna Leach, CBI Deputy Chief Economist.

Meanwhile, Tom Crotty, Group Director at INEOS and Chair of the CBI Manufacturing Council, said: “These results show what we already know – that manufacturers up and down the country are continuing to face very difficult circumstances as we move into the winter.”