UK factory orders hit six-month high amid ‘early signs’ of turnaround
Orders for February improved but still showed that more manufacturers saw orders fall rather than increase.
British manufacturing orders reached a six-month high in February, according to new figures.
The Confederation of British Industry’s (CBI) monthly industrial trends survey said the sector reported “early signs” of a turnaround during the month as political certainty improved.
The balance of manufacturers seeing increased orders improved to a reading of minus 18 for the month, from minus 22 in January.
This surpassed analysts’ expectations of minus 19 for the month but is still significantly below the survey’s long-run average of minus 13 as the sector continues to come under pressure.
The survey of 318 manufacturing firms reported that both total and export order books improved slightly, to their strongest positions in six months.
However, output volumes remained weak, falling for a fifth consecutive period, albeit at a slower pace than January.
The survey said that 15% of manufacturers reported total order books to be above normal, while 33% reported them as below normal.
Manufacturers were nevertheless optimistic, with those surveyed saying they expect growth to improve.
Alpesh Paleja, lead economist at the CBI, said: “It is encouraging to see manufacturers reporting some early signs of a turnaround in activity, but it’s probably still too early to say whether we’ve seen the end of the slowdown in the sector.
“Notwithstanding improving optimism, the sector is still grappling with longer-term uncertainty over the UK’s future relationship with the EU.
Tom Crotty, group director of Ineos and chairman of the CBI Manufacturing Council, said: “The beginning of 2020 seems to have seen an improvement in UK manufacturing activity following a difficult 2019.
“Nevertheless, there can be no doubt that this progress is fragile and the new-look Cabinet must therefore waste no time in working with manufacturers to tackle long-standing challenges and seize opportunities for growth.”
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