Know what you want? Try our 'Supplier Directory' 

CBI survey reveals strong output growth for UK manufacturers

Production among UK manufacturers grew at the fastest pace since January 1995 in the three months to July 2017, according to the latest quarterly CBI Industrial Trends Survey.

Production among UK manufacturers grew at the fastest pace since January 1995 in the three months to July 2017, according to the latest quarterly CBI Industrial Trends Survey.

The survey of 397 manufacturers also found that employee head count increased at the fastest rate for three years, and that hiring intentions for the coming quarter also improved. Optimism rose marginally in the three months to July, while export optimism for the year ahead rose at a slower, but still healthy pace.

Growth in total orders moderated in line with expectations, but remained robust. Meanwhile, domestic orders expanded at a strong pace, similar to the rate in the previous quarter, and growth in export orders also remained brisk, despite slowing somewhat.

Output growth is expected to continue to grow strongly in the quarter ahead and manufacturers are upbeat about prospects for overall demand. Domestic orders are expected to continue growing strongly, while expectations for growth in export orders improved to a four-decade high. Alongside robust expectations for demand, firms accumulated raw materials at the fastest pace since April 1977 and stocks of work-in-progress expanded at a record rate.

Investment intentions improved across the board against this backdrop, particularly for training and retraining, where planned growth in spending for the year ahead is the highest in over two years.

Meanwhile, input cost pressures cooled in the quarter to July and are expected to soften further in the near-term, while factory gate price inflation is also expected to be more subdued. 

Rain Newton-Smith, CBI chief economist, commented: “Output growth among UK manufacturers is the highest we’ve seen since the mid 1990s, prompting the strongest hiring spree we’ve seen in the last three years. Cost pressures are easing and firms are upbeat about the outlook for export orders. 

“It’s great to see the benefits from the decline in sterling for UK exporters feeding through. However, the flipside is the broader hit to consumer spending power across the economy from stronger inflation, which is likely to have fuelled the slowdown in the economy in Q1 and is expected to pull down growth in Q2.”

The survey has presented a number of key findings:

  • 18 percent of firms said they were more optimistic about the general business situation than three months ago and 13 percent were less optimistic, giving a balance of +5 percent. Optimism about export prospects for the year ahead grew (+13 percent) at a solid pace.
  • 43 percent of firms said the volume of output over the past three months was up and 12 percent said it was down, giving a balance of +31 percent, the highest since January 1995 (+33 percent).
  • 35 percent of businesses reported an increase in total orders, and 21 percent a decrease, giving a balance of +14 percent.
  • Domestic orders (+19 percent), expanded at a broadly similar pace to the previous quarter, with export orders growth remaining strong, despite slowing (+17 percent).
  • 32 percent of manufacturers said employee numbers were up, and 13 percent said they were down, giving a rounded balance of +18 percent – the highest since July 2014 (+26 percent).
  • Average unit costs grew at a more subdued pace (+20 percent). Growth in average domestic prices (+21 percent) and average export prices (+24 percent) was broadly unchanged.
  • Stock building of raw materials (+20 percent) was the strongest since April 1977 (+22 percent), whilst stocks of work-in-progress rose (+16 percent).

The survey also noted projections for the future:

  • Expectations for domestic order growth (+16 percent) are the most upbeat since April 2015 (+18 percent), whereas expected growth in export orders (+28 percent) is the highest in four decades (+37 percent).
  • Expectations for output growth (+28 percent) are the highest since April 2014.
  • Unit costs growth (+5 percent) is expected to moderate further over the next quarter and domestic price inflation (+9 percent) is anticipated to be more subdued.
  • Investment in training and retraining in the year ahead is expected to increase at the strongest pace (+28 percent) since January 2015.


Already Registered?
Sign In
Not Yet Registered?

Coronavirus industry update

UPDATED 22 April: In response to the Coronavirus pandemic, manufacturers, wholesalers and distributors are issuing statements regarding their operations as the situation evolves. The most up to date information from each company is listed below and ...


Carrier offers new CPDs on chiller efficiency

? Carrier is offering three new Continuous Professional Development (CPD) courses focusing on chiller efficiency and compliance in relation to the latest European and UK regulations....


Fridge Freezer Direct Introduces J & E Hall's range of Cellar Cooling

Reliable and energy efficient, the JCC range of cellar coolers are designed to be used in wine and beer cellars above or below ground.
ACR News is the number one magazine in the air conditioning and refrigeration industry. Don’t miss out, subscribe today!
Subcribe to ACR News


10th IIR Conference on Compressors and Refrigerants
Mostra Covegno Expocomfort
HRS 2020 Exhibition
14th IIR-Gustav Lorentzen Conference on Natural Refrigerants