The Business Magazine - B2B Business News - Site Logo
The Business Magazine March 2024
Read now
PICK YOUR EDITION

South: CBI survey shows manufacturing competitiveness with EU at record high 

26 October 2016
Share
Companies-default

The latest quarterly CBI Industrial Trends Survey, based on returns from 459 manufacturers, shows that manufacturing output and orders grew over the last quarter, with the growth in export volumes the strongest for two and half years.

Competitiveness in EU markets rose at +34%, the fastest pace since the series began in 2000, and competitiveness outside the bloc also improved at +17%, the quickest rate since 2009. Domestic demand grew modestly, and the outlook for demand over the next three months is generally positive.

Export orders rose to +8%, the highest balance since April 2014 (+16%), and they are expected to rise further (to +12%), as are domestic orders, though at a slower pace (+4%). 

But concerns persist about the availability of skilled labour, with almost a quarter of respondents observing that skilled labour availability could limit output over the next few months. 13% expect employment to increase, and 29% expect it to decline, giving a rounded balance of -15% – the lowest since October 2009 (-23%).

Optimism about the business situation fell slightly again following last quarter’s sharp decline. And numbers employed fell slightly for the first time since 2010 and look set to fall faster over the quarter ahead. But investment intentions improved following the decline last quarter, and investment plans for the year ahead are now more firmly above their long-run averages. 

Following sterling’s sharp depreciation, unit costs rose at their fastest pace in three years, and are expected to continue growing at above their long-term average over the quarter ahead. This was accompanied by modest domestic price inflation, as manufacturers sought to pass on some of the cost increase to their customers. 

Despite welcome signs of improved export demand and competitiveness, however, the majority of exporting manufacturing firms have said that the fall in the pound since June has had a negative impact on their business. In a supplementary question asked alongside this month’s survey, 47% of manufacturing firms cited sterling’s depreciation as having a negative impact, against 32% citing a positive impact.

Rain Newton-Smith, CBI chief economist, commented: “Access to skills clearly remains a high priority, so manufacturers will be looking to the Government to implement a new migration system that meets the needs of business while responding to clearly-stated public concerns. Maintaining a preferential route between the UK and the EU, our largest trading partner, will be important. Ultimately, all businesses need greater clarity from the Government on the fundamental issues of skills and barrier-free access to EU markets as soon as possible.”

More detailed indications are that 27% of firms said the volume of output over the past three months was up and 18% said it was down, giving a balance of +9%. 29% of businesses reported an increase in total orders, and 20% a decrease, giving a balance of +9%. 23% of manufacturers said employment numbers were up, and 28% said they were down, giving a rounded balance of -5%: above the long run average (-9%) but the lowest since April 2010 (-12).


Related topics

Related articles

Upcoming events

view more
06
Jun

South Coast Property Awards 2024

Hilton Southampton
Utilita Bowl
More info
18
Jul

Thames Valley Tech & Innovation Awards 2024

Reading FC Conference & Events
Select Car Leasing Stadium, Reading
More info
12
Sep

Thames Valley Property Awards 2024

Ascot Pavilion
Ascot Racecourse
More info
03
Oct

South Coast Tech & Innovation Awards 2024

Hilton Southampton
Utilita Bowl
More info
07
Nov

Thames Valley Deals Awards 2024

Reading FC Conference & Events
Select Car Leasing Stadium, Reading
More info

Related articles