UK manufacturers expect the pace of decline in output to slow markedly in the next quarter, a survey has revealed.
The CBI’s monthly Industrial Trends survey for May showed that 17% of 575 firms polled expect the volume of output to increase over the next three months compared with 34% who anticipate a fall.
The resulting balance of minus17% is a marked improvement on the previous month’s balance of minus 32% and takes the measure back to where it was before the collapse of Lehman Brothers last September.
Andrew Palmer, CBI regional director for Yorkshire, said: “After scaling back production very sharply at the beginning of the year, manufacturers can see a glimmer at the end of the tunnel. They still expect manufacturing activity to fall, but at a much slower rate over the next few months.
“However, this was another tough month for firms, with orders at home and abroad still at very weak levels. With stock levels high relative to expected demand, manufacturers are likely to remain focused on running down their stocks further.”
Demand for UK-made goods remains weak with 10% of firms reporting above normal total order books in May against 66% saying they were below normal. The resulting balance of minus 56% is broadly unchanged from each of the previous three months.
Export order books remain below par, despite the relative weakness of the pound.