Tuesday 22 September 2020 11:30 am

UK manufacturing orders stall for first time since April

The UK’s manufacturing firms saw orders stagnate in September for the first time since April as companies faced “headwinds from a resurgence of the virus”, a new survey has shown.

However, manufacturing output volumes fell at a slower pace than in August, the latest CBI industrial trends survey said.

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Anna Leach, CBI deputy chief economist, said: “It’s good to see that output volumes once again fell at a slower pace this month compared to August.”

Yet she said it “is disappointing to see the modest improvements in order books stall, with demand at a still weak level”.

Leach said that “manufacturing firms continue to battle against headwinds from a resurgence of the virus”. She called on the government to “step up its support”.

The monthly CBI survey showed that total order books deteriorated slightly compared to August. 

Orders down but output holds up

The overall balance of firms reporting a fall compared to those reporting a rise came in at minus 48 per cent. That was well below the long-run average of 14 per cent.

Yet output in the three months to September fell at a slower pace than in the three months to August, with a score of 20 per cent compared to 46 per cent a month earlier.

Tom Crotty, group director at Ineos and chair of the CBI manufacturing council, said: “Manufacturers have endured a very difficult summer and these weak activity figures are, therefore, not surprising. 

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“Firms across the country are facing considerable uncertainty as the end of the job retention scheme.” He also said that “concerns about the potential for a no-deal Brexit have escalated as negotiations remain in stalemate.”

Crotty added: “It is also crucial that a deal is agreed with the EU, as it is essential to support the economic recovery across the UK.”