UK manufacturing output declines in final three months of the year as pessimism grows over 2016

Chris Papadopoullos
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Container Ships Unload At Tilbury Port
British exporters are being hindered by the strength of the pound (Source: Getty)

Output from UK factories declined over the last the three months, with many expecting further weakness in early-2016, according to a business survey published today.

The Confederation of British Industry’s industrial trends survey showed 27 per cent of firms reporting output had fallen over the past three months, compared with 24 per cent where output had gone up. The balance of minus three per cent is down from four per cent in November, signalling a decline in output.

Over the next three months, 19 per cent of manufacturers expect output volumes to climb, compared to 24 per cent that expect a fall. The balance of minus five per cent is similar to November’s minus six per cent and shows manufacturers expect output to weaken – until last month, the figure had been positive throughout the year.

Read more: UK manufacturing in terminal decline warns trade body

The survey of 473 firms showed a slight improvement in exports, but they still remain weak by historical standards and official figures show manufacturing output is still below pre-recession levels.

Samuel Tombs from Pantheon Macroeconomics said it marked “a weak end to a bad year for manufacturers.

Next year isn’t looking promising. Tombs added:

Past experience suggests that changes in the exchange rate take up to two years to have their full impact on exports. As a result, 2016 still looks set to be another tough year for manufacturers, even though the pound has stabilised over recent months.

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