BRITAIN’S manufacturing sector has held up surprisingly well this month, the Confederation of British Industry (CBI) claimed yesterday.
The CBI survey for August was notably more upbeat than other recent studies – such as a purchasing managers’ index showing the factory sector contracting this summer.
“Manufacturing order books are holding up, and expectations for output growth are above their historical average, although they are less strong than earlier this year,” said the CBI’s Richard Woolhouse.
The business group’s industrial trends survey found a positive balance of plus one per cent of manufacturers reporting “above normal” orders – well above the long-term average of minus 18 per cent.
Exports also picked up, according to the survey. The proportion of British factories recording “above normal” export orders was level with those reporting “below normal” – an improvement from a negative balance of minus eight per cent in July, and considerably better than the long term average of minus 21 per cent.
“But the risks to manufacturing activity and business confidence have if anything increased, due to market volatility and the recalibration of growth expectations worldwide,” warned Woolhouse. “Concerns around growth in the US and the euro area present further challenges to the manufacturing recovery.”
Samuel Tombs of Capital Economics advised against jumping to any bullish conclusions: “The message of the survey does go against the grain of recent news on manufacturing, and it has occasionally been too upbeat relative to the official data in the past,” he said.
The CBI’s figures also contrasted with another negative manufacturing survey from across the pond. The Richmond Federal Reserve’s composite index of factory activity in its district slumped to -10 from -1 in July, it revealed yesterday.