UK manufacturing order books hit 10-month high in December

The latest CBI monthly Industrial Trends Survey also pointed out order books remain weak by historical standards.

By comparison, the improvement in export order books was much less marked, leaving order books far below their long-run average.

The survey of 261 manufacturers found that output volumes fell at the slow pace in the three months to December as experienced in the three months to November. Output declined in seven of 17 sub-sectors, with the headline fall mostly led by the motor vehicles and transport equipment sub-sector.

Looking ahead, firms anticipate that output will fall at a similarly modest pace over the next three months. This marks a slight improvement in expectations since last month’s survey. Manufacturers also expect muted pricing pressure in the next three months.

Anna Leach, CBI deputy chief economist, said: “In a positive sign for the pipeline of manufacturing activity, total order books in December improved to their strongest since February. By contrast, despite a mild improvement, export order books remained poor.

“The rollout of the Covid vaccine brings hope that conditions for manufacturers will improve in the coming months. The government must continue to do what it can to support companies through the winter while demand remains disrupted by Covid restrictions.”

Tom Crotty, group director at INEOS and chair of the CBI Manufacturing Council, added: “2020 has been an incredibly difficult year for manufacturers, as firms have had to deal with the dual impact of a global pandemic and continued Brexit uncertainty. While the roll-out of the COVID-19 vaccine raises hopes for the future, government will still need to support manufacturers to get through the winter. One of the key ways the government can help manufacturers is to strike a Brexit deal, as manufacturing is one of the sectors that would be hardest hit by a no deal Brexit.”

The December 2020 CBI Industrial Trends Survey was conducted from 23 November to 11 December, with 261 manufacturing firms responding.

CBI www.cbi.org.uk