Insight 45 - Magazine - Page 18
MANUFACTURING OUTPUT FALLS AT JOINTSTEEPEST PACE IN FOUR YEARS - CBI INDUSTRIAL
TRENDS SURVEY - MAY 2025
M
anufacturing output volumes
fell in the three months to May,
at the joint-steepest pace since
August 2020, according to the CBI’s latest
monthly Industrial Trends Survey (ITS).
Looking ahead, output is expected to fall
further over the three months to August.
Total order books weakened marginally in
May, relative to April, while export order
books improved from a sharply negative
reading last month. But both total and
export order books remain well below
their long-run averages. Manufacturing
firms reported that stock adequacy for
finished goods was largely unchanged
from last month, with the balance standing
close to the long-run average.
Expectations for selling price inflation over
the coming quarter were broadly similar to
last month, remaining above the long-run
average.
The survey, based on the responses of 281
manufacturers, found:
• Output volumes fell in the three months
to May at the joint-steepest pace since
August 2020 (weighted balance of -25%,
the same as in December 2024, and
down from -2% in the quarter to April).
Manufacturing firms expect output
volumes to decline again in the three
months to August (-14%).
• Output decreased in 13 out of 17 subsectors in the three months to May, with
the fall in output being driven by the
metal products, food, drink & tobacco
and mechanical engineering sub-sectors.
• Total order books were reported as below
“normal” in May (-30% from -26% in
April). The level of order books remained
far below the long-run average (-14%).
• Export order books were also below
“normal” but improved relative to last
month (-29% from -41%). The balance
still stands below the long-run average
(-18%).
• Expectations for average selling price
inflation in May were broadly similar
to last month (+26% from +23%).
Expectations remain above the long-run
average (+7%).
• Stocks of finished goods were reported
as more than “adequate” in May (+10%
18
"Many respondents
to the survey
reported a reluctance
to spend among their
customers"
from +13% in April), with stock adequacy
standing close to the long-run average
(+12%).
Ben Jones, CBI Lead Economist, said:
“Sentiment among UK manufacturers
seems poor, reflecting a combination of
rising domestic business costs and US
tariff uncertainty. Many respondents to
the survey reported a reluctance to spend
among their customers.
“Although there are some bright spots,
notably aerospace and renewable energy,
bIZ4BIZ INSIGHT MAGAZINE | JUNE 2025
the sector as a whole is reporting that
their order books remain weak, and this
is expected to weigh on output volumes
through the summer.
“While the government has taken steps to
boost UK competitiveness on the global
stage by striking trade deals with India,
the US and a UK-EU reset, more action is
needed to shift the dial.
“Businesses are facing pressure from
high energy costs, rising labour costs and
the threat of extra regulation with the
Employment Rights Bill coming down the
track. Government must avoid further
burdening business while simultaneously
building confidence through the launch of
an innovative Industrial Strategy.
“At a time of heightened global economic
uncertainty this could really help to
promote the UK as an attractive and stable
environment for investment, which is
critical for driving long-term, sustainable
growth.”
