Manufacturing output volumes continued to decline in the three months to September, although the rate of contraction eased compared to the previous quarter, according to the latest
Industrial Trends Survey from the
CBI. The weighted balance for output fell to -13%, improving from -22% in the three months to August. However, manufacturers remain cautious, anticipating a similar pace of decline through to December, with expectations sitting at -14%.
The downturn was broad-based, with 13 out of 17 sub-sectors reporting falling output. The chemicals, metal products, and mechanical engineering sectors were the primary contributors to the overall drop. Order books remained under pressure, with total orders were described as below ‘normal’ by respondents, with a balance of -27%, up slightly from -33% in August but still well below the long-run average of -14%. Export orders showed no improvement, holding steady at -32%, compared to -33% in the previous month, and also below the long-run average of -19%.
Selling price expectations softened notably in September. The balance fell to +4%, down from +9% in August, marking the weakest reading since October 2024 and significantly below the January peak of +27%. This suggests easing inflationary pressures within the sector. Stocks of finished goods were reported as more than adequate, with a balance of +12%, up from +7% in August and in line with the long-run average.
Ben Jones, the CBI’s lead economist, said: “Manufacturers report a mix of pressures weighing on the sector: high energy costs; uncertainty over taxation and economic policy; and ongoing difficulties in accessing skilled labour. In this environment, planning for growth is extremely challenging, and this is feeding through to weaker orders, output and investment. While the pace of decline has eased, conditions look set to remain tough through to the end of the year.”