Manufacturing shows tentative signs of revival - CBI survey
Manufacturing activity continued to decline in the three months to February but the sector showed tentative signs of revival, according to the Confederation of British Industry.
Factory output fell at a slightly slower pace than in January, the CBI's industrial trends survey showed. The decline was led by food, drink and tobacco and mechanical engineering.
Manufacturers expect output to recover slightly in the next three months, the second consecutive monthly survey to show predicted growth. Stock adequacy was roughly in line with the long-run average after falling back from highs over the past year.
Britian's manufacturing sector has been in recession for the past year as political and economic uncertainty has hit domestic and foreign orders for British-made goods.
The CBI's survey appears to show an easing of these pressures after the Conservatives' clear election victory and the passage of Brexit at the end of January. But the employers organisation warned that the pick-up was fragile as the UK attempts to negotiate a trade deal with its biggest trading partner the European Union.
Alpesh Paleja, the CBI's lead economist, said: “It is encouraging to see manufacturers reporting some early signs of a turnaround in activity, but it’s probably still too early to say whether we’ve seen the end of the slowdown. The sector is still grappling with longer-term uncertainty over the UK’s future relationship with the EU."
The CBI's survey of 318 manufacturers found 15% reported total orders books above normal while 33% were below normal, giving a balance of -18%. The score remained below the long-run average of -13%. A balance of +8% expect output volumes to recover in the next three months.