The optimism among manufacturers slightly decreased in July, following a rise in April for the first time in nearly three years, as reported by the CBI’s latest quarterly Industrial Trends Survey. Despite output volumes remaining broadly unchanged in the quarter to July, underperforming expectations for growth, there is a strong belief among manufacturers that output will increase in the next three months.
Though total new orders fell in the quarter to July, the expectation is for them to remain stable over the next three months. Inventory building is anticipated to provide support to output in the upcoming months, with stocks of work in progress, raw materials, and finished goods expected to increase.
While average cost growth accelerated compared to April and remained high relative to historical norms, it is expected to slow in the quarter to October. Both domestic and export price inflation also increased but are forecasted to decrease in the next three months.
Moreover, manufacturers have plans to increase their headcount in the coming months at the fastest pace in a year, and investment intentions for the year ahead have improved overall. Ben Jones, CBI Lead Economist, mentioned that the overall sentiment in the manufacturing sector has cooled slightly, but the outlook remains positive with expectations of growth.
The survey, which involved 257 manufacturing firms, found that output volumes, new orders, business sentiment, investment intentions, costs, prices, stocks, and employment trends were all closely monitored and analyzed.
