Orders fall among small manufacturers

Thursday 8 November 2012

Manufacturing output rose in March

The UK's small and medium-sized manufacturers experienced a drop in domestic and export orders in the three months to October.

According to the Confederation of British Industry (CBI), total new orders fell (a balance of -13 per cent) as output reduced by nine per cent over the quarter.

However, output but is expected to grow slightly in the next three months, with a five per cent increase projected.

The proportion of small manufacturers reporting that the levels of orders or sales was a factor likely to limit output over the next three months rose compared with the previous quarter.

This reached 74 per cent, the highest level since January 2012.

A balance of -12 per cent said they were less optimistic about the business situation in the three months to October.

Lucy Armstrong, chair of the CBI’s SME Council, said small and medium-sized manufacturers will be "disappointed" by the slide in demand during this quarter.

"Production levels have fallen for the second quarter running and profit margins continue to be squeezed, as output price inflation fails to match growth in costs," she noted.

“There are some signs of improving prospects going forward, with firms expecting to increase output slightly in the next three months and more positive investment intentions."

However, Ms Armstrong said the economic climate "clearly remains tough".

She noted that businesses are exposed to subdued conditions both at home and in our major export markets.

Posted by Dan Smith