Manufacturing output remains strong, even though orders have weakened. That’s the story for the first quarter of 2018.
The news comes from the Confederation of British Industry (CBI), which has released its monthly Industrial Trends Survey.
The key takeaways from the report, looking at the prospects of a cross-section of British manufacturing (381 companies took part), is that export orders remained the same for Q1, but above the long-run average, whereas output continued to grow. Growth, however, was at a slower pace than in the three month run up to February.
The growth in output was spread across 14 of the 17 manufacturing sub-sectors, but primarily driven by motor vehicle and transport equipment, along with chemicals and electronic engineering.
The CBI goes on to forecast that a combination of strong demand throughout the world and a lower pound would continue to underpin the manufacturing sector.
Commenting on the report’s findings, the CBI’s Head of Economic Intelligence said: “Robust global growth and the low pound have gifted UK manufacturers a strong first quarter in 2018. Although total order books and output growth slipped relative to February, demand and output growth remain well ahead of long-run averages.
“Confidence among manufacturers will have been given an additional boost by the agreement of a transition deal, giving them the confidence to continue investing and planning for growth. Other hurdles on the Brexit path need to be cleared in the same spirit – this includes a speedy agreement of a mutually beneficial trade deal for both the UK and the EU, with a customs union one of the options on the table.”
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