The latest report by the Confederation of British Industry (CBI) shows that order books for UK manufacturers are up, but prices are rising at their fastest pace in two years.
23 per cent of manufacturers reported total order books to be above normal, with 38 per cent of manufacturers expecting output to grow robustly in the coming quarter. Sterling’s sharp depreciation following the Brexit vote is however pushing up the price of materials, with manufacturers expecting to increase average selling prices over the next three months by more than 19 per cent, the fastest pace since January 2014 (+20 per cent).
Commenting on the results, Rain Newton-Smith, CBI Chief Economist, said: “It’s good to see manufacturers’ overall order books at healthy levels, and the outlook for output growth remaining robust as we head into Christmas.
“But the weak pound is beginning to make its mark, and prices are expected to rise, especially in the food and drink sector. On the flip side though, export orders remain above average.
“To bolster British industry, manufacturers want to see bold decisions in the Autumn Statement. A crystal clear focus is needed on infrastructure, investment and innovation from the Chancellor, so that firms are given the very best environment in which to grow, both at home and abroad.”
The survey of 430 manufacturers found that total order books returned to levels seen throughout the summer, and well above the long-run average.
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