The gloom overshadowing Britain’s manufacturing sector persisted in November, as output volumes continued to fall, although the extension to the Brexit deadline did bring with it some positive signs, such as a pick-up in order books, according to a survey.
The Confederation of British Industry’s monthly industrial trends survey showed output expanded in only five out of 17 sub-sectors, predominantly due to declines in the motor vehicle and metal products sectors.
However, the survey of 307 manufacturers showed an improvement in total order books, which came in at –26 for the three months to November, above October’s nine-year low of –37 and beating a consensus forecast for –31. Export orders improved to –22 from –41, their lowest level since the 2008 financial crisis.
Uncertainty over the timing and terms of the UK’s departure from the European Union have hit British manufacturers hard. The sector fell into recession in October and, although the Government agreed to push the Brexit deadline back by three months to January 31, looks unlikely to bounce back quickly.
“While the thick fog of uncertainty from a no-deal Brexit has lifted somewhat, the manufacturing sector remains under pressure from weak global trade and a subdued domestic economy,” CBI deputy chief economist Anna Leach said.
“Order books remain below average and output volumes continue to fall. When taking into account the deteriorating outlook for manufacturing globally, it’s clear that the outlook for the sector remains precarious.”
The survey showed manufacturers expect output volumes to essentially flatline over the following three months.
Sterling was still down 0.1 percent on the day against the dollar at $1.294, and by 0.2 per cent against the euro at 0.856 pounds, but the CBI data helped lift both currency pairs off the day’s lows.