UK manufacturing demand slides

Demand for UK manufactured goods, including clothing, is at its weakest in 17 years, and firms expect output levels to fall sharply over the next three months, the CBI has revealed . Its latest Monthly Industrial Trends survey showed that, despite the weakened pound, export order book levels have continued to slide, and that manufacturers again expect their domestic prices to fall in the next three months.

John Cridland, CBI Deputy Director-General, said: "UK manufacturers continue to suffer as the recession worsens, and their order books have weakened further this month. "The weak pound has made UK exports more competitive, but this advantage has been outweighed by falling global demand. "Moves to get credit flowing around the economy must bear fruit soon if job losses and further damage to the sector are to be mitigated."

Asked about their expectations for output volumes in the next three months, 12% of firms said they expected them to increase, while 56% said they would fall. The resulting balance of -44% was similar to that of the past three months, and still the lowest since September 1980 (-48%).

A balance of 56% of respondents said that total order book levels were below normal, up from the net 48% of firms in January. This represents the weakest demand for UK manufactured goods since January 1992 (-60%). Export orders fell further below par, with a balance of 49% of firms reporting export order books below normal, which marked a deterioration from January (-39%), and is the weakest since November 2001 (-50%). Manufacturing firms expect to lower domestic prices over the next three months, and the balance of 13% predicting a fall is similar to January (-12%).

Image: clothing manufacturer