Manufacturing optimism rises but job cuts to continue warn CBI

The latest CBI Regional Trends Survey has revealed that manufacturer optimism has risen in almost half the UK's regions, but warned that 36,000 manufacturing jobs could be axed over the next three months.

The latest Regional Trends Survey published today by the CBI and Experian Business Strategies shows optimism was still "generally low" but had risen in five of the UK's 11 regions.

The survey revealed a better picture for export prospects with more than half the regions saying they were "more optimistic" about exports over the year ahead. While every region, apart from Wales and Northern Ireland, saw orders fall over the last quarter, the majority of regions expect total orders to rise over the next three months.

Seven regions expected output to increase with the biggest increases expected in Northern Ireland, Wales and the North West. The West Midlands, however, stood out in the report as "deeply pessimistic" and manufacturers expect falls in total orders, exports and output for the next three months.

CBI Head of Economic Analysis, Doug Godden, said: "Three months ago manufacturers were gloomy in almost every region. There has been an encouraging turnaround in some of the regions though severe difficulties remain and there are some sharp contrasts in outlook."

Despite recovery appearing to be under way in many regions manufacturers are still under severe pressure. Over the last three months manufacturing jobs continued to be lost in all but one region. Nationally the survey indicates 31,000 manufacturing jobs were shed during the third quarter of this year.

The fastest rate of job cutting was in the South East and London and estimates based on the survey suggest the region will see the sharpest fall in manufacturing jobs over the next quarter.

The survey suggested that, across the UK, a further 36,000 jobs will go by the end of the year.

Demand in the UK remains weak preventing firms from raising prices. Domestic prices fell in every region and only manufacturers in Northern Ireland, the South West and North West expected prices to increase over the next three months.

(SP)