Manufacturing shows 'encouraging signs', claims CBI

The CBI today reported more "encouraging signs" for manufacturers as domestic and export orders showed some improvement in November.

Publishing its monthly industrial trends survey, the employer's body said order books, which deteriorated sharply in September and October, have now returned to the August level.

Of the 837 firms questioned, 37% reported total orders below normal and 13% above normal. The negative balance of minus 24% compares with minus 40 in October and minus 33 in September.

Capital goods industries - such as mechanical engineering and industrial and agricultural machinery - recorded weakest order books, while consumer goods firms faired comparatively better.

Export order books, although significantly below normal, are at their highest level for nearly a year-and-a-half. Two out of five of firms said export orders were below normal, 13% said they were above. The balance of minus 27% compares with minus 37 in October.

Output is expected to remain broadly unchanged over the next three months, but pricing conditions are expected to be tough over the same period as prices fall more steeply.

Douglas Godden, CBI Head of Economic Analysis, said: "Manufacturers' order books are now a little fuller than earlier in the year, justifying the improvement in sentiment picked up in the October survey. The firmer global recovery is finally beginning to bolster export orders. But conditions facing the manufacturing sector are still tough and are likely to remain so for a good while to come."

The monthly Industrial Trends survey was carried out between 22 October and 7 November 2003 and 837 manufacturers responded. During the period sterling averaged €1.45 (DM2.84) and $1.68 compared with €1.43 (DM2.80) and $1.66 in the October survey.

(gmcg)