Manufacturing Sector sees Activity Drop but Demand Remains Steady

Posted on 21 March, 2016 by Chris Grigorovsky

The manufacturing sector saw activity fall in March, although production is expected to rebound over the next three months, according to CBI’s Industrial Trends Survey.

Manufacturing Sector sees Activity Drop but Demand Remains Steady

A survey of 471 manufacturers had found that output volumes over the three months to March fell at the fastest pace since September 2009. Out of 18 manufacturing sub-sectors, 8 had posted output decline. The food and drink sector attributed to two-thirds of the decline, which is possibly due to production being hit by localised flooding and mild weather.

Over the next quarter however, manufacturers are anticipating a reasonably strong rise in output, with 39% predicting growth, which is the highest level for thirteen months, with a rebound in food and drink.

Elsewhere, total order books saw a slight rise compared to the level at the start of the year, while export orders remained unchanged from last month.

Companies are still anticipating a fall in prices in the near-term but in a lesser extent to the previous month.

“March has been a mixed month for the UK’s manufacturers. Whilst total order and export books remained steady, a drop in output reflected some volatility in the food and drink sector. Reassuringly, manufacturers expect a swift turnaround in activity.

“While the Budget included several policies that should drive growth, the absence of further measures to support innovation, and research and development, was a missed opportunity to boost investment. The Government’s upcoming National Innovation Plan needs to address this vital issue.”

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