Further fall for manufacturing output – CBI – Finance-Base
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November 26, 2021
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Manufacturing

Further fall for manufacturing output – CBI


Manufacturing output fell slightly within the quarter to February, but in a more modest rate than in the first lockdown last Spring, according to the latest CBI Industrial Trends Survey.

The survey of 296 manufacturers also found that output increased in 11 of the 17 sub-sectors. However, growth in these sub-sectors was outweighed by sharp falls in other people – particularly motor vehicles & transport equipment and food, drink & tobacco.

Looking ahead, manufacturers anticipate output to become broadly flat over the next three months, marking a notable step up from expectations of a significant decline in January.

Total orders books improved, to some similar position as in December 2021, while export order books worsened on January. Both continue to be far weaker than their respective long-run averages.

Manufacturers also reported that stock adequacy weakened slightly from January and expect output prices to be broadly steady in the next quarter.

Alpesh Paleja, CBI Lead Economist, said: “Manufacturing activity remains patchy, but so far appears to have taken a smaller hit compared to previous lockdowns. However, a stubbornly mixed picture persists one of the different manufacturing sub-sectors, pointing towards the asymmetric impact of restrictions.

“With some much-needed clarity coming down the track in the Government’s roadmap for easing lockdown, it is essential that manufacturers are supported beyond April, in line with the restrictions that will remain.

“Immediate steps to increase the Job Retention Scheme and deferring VAT repayments 'till the end of June are essential, alongside business rates relief to safeguard jobs.

“In the upcoming Budget, wider reform in our outdated business rates regime is vital, to curb cost pressures on firms and stimulate business investment, which is a key ingredient in our economic recovery.”

Tom Crotty, Group Director at INEOS and Chair from the CBI Manufacturing Council, said: “The start of 2021 has been tough for manufacturers as firms acclimatise to life outside the EU and grapple using the challenges of lockdown.

“As we look forward to the future, there is an incredibly exciting chance of the government to work with firms to assist shape a manufacturing sector that's capable of driving the UK’s post-COVID economic recovery.

“Meanwhile, however, it’s important that the sector retains access to the support it needs to cope with the next few difficult months.”

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