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Tony Caldeira
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Steve Purdham

Manufacturing output in biggest drop since 2009

Manufacturing output fell at the fastest pace since September 2009 in the three months to March - but production is expected to rebound strongly over the next three months, according to the CBI Industrial Trends Survey.

The survey of 471 manufacturers found that 18 per cent of firms said the volume of output was up over the last quarter, while 33 per cent said it was down.
In total, eight of the 18 manufacturing sub-sectors posted a decline in output. Two-thirds of this decline (relative to February) reflected weakness in the food and drink sector, with localised flooding and mild weather potentially having hit production.

Nevertheless, manufacturers forecast a strong rise in output over the next quarter, with expectations at the highest level for 13 months. In total, 39 per cent predicted growth in output over the next three months, while 16 per cent predicted a decline.

Meanwhile, total order books rose slightly from the level seen since the start of the year, and export orders also remained unchanged from February. Both measures sit just above average levels.

Companies still anticipate that prices will fall in the near-term, albeit to a lesser extent than they did in the previous month.

Rain Newton-Smith, CBI director of economics, said: "March has been a mixed month for the UK's manufacturers. While 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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