Exports weigh on UK manufacturing growth
The recovery in British manufacturing continued in the three months to April but the pace of growth eased and growth in export orders remained sluggish, according to the latest CBI Quarterly Industrial Trends Survey.
The survey of 468 firms reported an easing of growth in total new orders compared with the previous quarter. Domestic orders rose modestly, whilst exports growth remained sluggish. Meanwhile output growth fell to its lowest since January 2013, but above the long-run average.
Firms have stronger expectations for the three months ahead, with output and orders growth anticipated to firm up but the number of firms highlighting orders or sales as a possible constraint to activity rose to its highest level since October 2013.
Looking to the year ahead, investment intentions have fallen sharply from strong levels across all categories, though they do remain at or above their long-run averages. Growth in optimism about both the current business situation and export prospects for the year ahead also dropped back.
Katja Hall, CBI deputy director-general, said: “Exports keep dragging at the heels of growth: firms are finding the recent rise in the Pound against the Euro challenging, making them less competitive in Europe, while the unravelling situation in Greece is creating uncertainty.”
Separately, the CBI has published monthly figures for April, which show that total order books for manufacturers remained in line with normal levels. Export orders were below par (-11%), but were above their long-run average (-20%).