UK manufacturers’ order book balance unexpectedly declines in April

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

According to the report, the CBI's monthly factory order book balance decreased to -8 in April from -5 in the previous month but remained above its long-run average of -14. Economists had forecast the reading to come in at 2. 

The CBI also reported that output volumes in the three months to April were broadly flat (+3 from +3 in March), while total new orders grew at their quickest pace since April 2019 (+5 from -12 in January). It was also expected that both output (+36) and orders (+20) growth would pick up rapidly in the next quarter.

In other survey results, manufacturing optimism in the three months to April (+38) improved at its quickest pace since April 1973, while investment intentions for the next year saw a strong, broad-based improvement, with firms expecting to spend more on buildings, plant and machinery, product and process innovation, and training and retraining compared to last year. Numbers employed in the three months to April (+10) grew at their quickest pace since July 2018, and are seen to accelerate their growth further next quarter (+19) with expectations at their strongest since April 1974.

Cost pressures continue to temper the outlook for the manufacturing sector, however. Average costs growth in the quarter to April (+48 from +34) accelerated at its quickest pace since April 2011 and costs are forecast to grow at a similarly rapid rate next quarter.