WiredGov Newswire (news from other organisations)
UK manufacturing output flat, but cost and price inflation ease to slowest pace since 2021 - CBI Industrial Trends Survey
Cost and pricing pressures in UK manufacturing remain high, but shows signs of easing, according to the CBI’s latest Industrial Trends survey. In the quarter to January, average unit costs grew at the slowest pace since April 2021, while domestic selling price inflation was the slowest since July 2021. But both remained far above their long-run averages.
Manufacturers reported stable output volumes in the quarter to January, following a modest decline in the quarter to December. New orders were flat, while the volume of total order books fell further below normal, suggesting that output has been supported in part by manufacturers tackling backlogs of work. Looking ahead, manufacturers expect new orders and output volumes to increase in the next quarter, but the share of firms reporting that orders or sales would constrain output nonetheless reached its highest since April 2021.
The survey, based on the responses of 321 manufacturing firms, found that:
- Business sentiment fell for the fifth consecutive quarter, but at a much slower rate than in the three months to October (balance of -5%, from -48%). Export optimism also fell, but less quickly than in October, when it dropped at the fastest pace in two years (-22%, from -31%).
- Output volumes were stable in the quarter to January, after falling in the three months to December (weighted balance of -1% from -9%). Rising output in the mechanical engineering and food, drink & tobacco sub-sectors was offset by falls in chemicals, metal manufacturing and motor vehicles & transport equipment. Firms expect volumes to increase briskly in the next three months (+19%).
- Demand-side factors were seen as more likely to limit output in the next three months (57% of respondents cited orders or sales as a likely constraint, from 43% in October; average of 71%). Supply-side constraints remain historically significant, but have eased: shortages of skilled labour (38%, from 49%; average of 16%); shortages of materials/components (44%, from 54%; average of 11%).
- Total new orders were broadly stable in the quarter to January (balance of -3%, from -8%). However, the volume of total order books fell further below normal (balance of -17%, from -6% in October). Manufacturers expect new orders to rise over the next three months (+9%).
- Average costs growth remained exceptionally strong in the quarter to January, but nonetheless eased, with costs rising at the slowest pace since April 2021 (balance of +64%, from +82% in October; average of +17%). Cost growth is expected to slow further in the quarter to April (+53%).
- Average domestic selling price inflation also eased but remained elevated in the quarter to January (balance of +37%, from +50% in October; vs average of +2%). Domestic price inflation is expected to remain elevated over the next three months (+41%).
- Numbers employed continued to rise in the three months to January, albeit at a slower pace (+14%, from +26% in October). Firms expect headcount to rise further in the next three months (+24%).
- Investment intentions for the year ahead were mixed. Manufacturers expect to raise investment in training and retraining (+20%, from +14%), plant and machinery (+8%, from +6%) and product and process innovation (+6%, from +7%). Investment in buildings is expected to decline in the year ahead (-9% from -5%).
Anna Leach, CBI Deputy Chief Economist, said:
“Mixed conditions are apparent in the manufacturing sector this month. Global supply chain pressures, labour shortages and energy costs are easing, enabling unit cost growth to ease back from record highs.
“But there are signs that demand is easing too, with order books weakening sharply, spare capacity in the manufacturing sector rising and the share of firms citing the strength of sales or orders as a potential constraint on output rising to its highest in almost two years.”
Latest News from
WiredGov Newswire (news from other organisations)
NHS Confederation - Latest winter situation report reveals that the NHS is under more pressure than it was last year26/01/2023 14:25:00
Dr Layla McCay comments on the latest winter situation report and workforce data.
Protecting those in poverty a critical priority - LGA response to JRF report on poverty26/01/2023 12:20:00
Cllr Peter Marland, Chair of the Local Government Association’s Resources Board responded to a Joseph Rowntree Foundation annual report on poverty, which shows that 13.4 million people were in poverty during 2020/21 including 3.9 million children
‘Local audit is in crisis’ – LGA responds to NAO report on Timeliness of Local Auditor Reporting26/01/2023 09:25:00
Cllr Pete Marland, Chair of the Local Government Association’s Resources Board responded to a report by the National Audit Office on the timeliness of local auditor reporting
11 months of war in Ukraine have disrupted education for more than five million children - UNICEF25/01/2023 13:25:00
The ongoing war in Ukraine has disrupted education for more than five million children, UNICEF warned today, calling for increased international support to ensure children do not fall further behind. The impact of 11 months of conflict only compounds the two years of lost learning due to the COVID-19 pandemic, and more than 8 years of war for children in eastern Ukraine.
11 months of war in Ukraine have disrupted education for more than five million children – UNICEF25/01/2023 10:10:00
The ongoing war in Ukraine has disrupted education for more than five million children, UNICEF warned, calling for increased international support to ensure children do not fall further behind. The impact of 11 months of conflict only compounds the two years of lost learning due to the COVID-19 pandemic, and more than 8 years of war for children in eastern Ukraine.
Audit Wales - Local authorities find it difficult to empower people and communities to be more self-reliant and less dependent on services25/01/2023 09:10:00
In recent years local government in Wales has faced significant pressures, dealing with crisis after crisis, but with less resource now available they need communities and people to do more for themselves
NHS Confederation - NHS leaders will welcome government’s recommitment to narrowing the gap in Healthy Life Expectancy by 203024/01/2023 16:05:00
Dr Layla McCay responds to the government's announcement of their Major Conditions Strategy.
We must shift the narrative on ageing and disability – LGA responds to Archbishops’ Commission report on Reimagining Care24/01/2023 11:20:00
Cllr David Fothergill, Chairman of the Local Government Association’s Community Wellbeing Board responded to ‘Care and Support Reimagined’, a report from the Archbishops’ Commission
NHS Confederation - Mental health leaders are committed to ensuring the safety and dignity of those who need inpatient care24/01/2023 10:25:00
Sean Duggan OBE responds to the government's announcement of a rapid review of patient safety in mental health inpatient settings.