MNI: UK Manufacturing Remains Strong In December: CBI

-- December CBI Total Order Book Balance +8% Vs +10% November

By Jai Lakhani

     LONDON (MNI) - UK manufacturing orders were robust in December, coming in

at +8, according to the latest CBI Industrial Trends Survey. November saw a

solid rise of sixteen points to +10.

     --MONTHLY ORDERS MODERATE

     The fall of two points in December to +8 was a slight fall from November's

four-month high. It was significantly above the long-run average of -13. Given

Brexit uncertainty, it was encouraging that export order books strengthened 14

points to +14, well above the historical average of -17. 

     In the three months to December, the volume of output picked up to +23 from

+18 in November. This was driven by output expanding in 15 out of 17

sub-sectors, with food, drink and tobacco as well as mechanical engineering and

chemicals leading the growth. 

     --BUSINESSES ANXIOUS

     Whilst December's readings are encouraging, growth is expected to slow in

the coming quarter, with the volume of output expected over the next three

months at +14, 9 points below the three months to December. This suggests the UK

manufacturing sector is still facing headwinds in the shape of subdued domestic

momentum and ongoing Brexit uncertainty. 

     --"WELCOME" EXPORT FIGURES

     "The UK's manufacturing sector enters the Christmas period with a small

upswing, with output growth gathering further pace. The firming in export orders

is also particularly welcome," said Anna Leach, CBI Head of Economic

Intelligence.

     Leach went on to add that the future relies on what the trade environment

with the EU will be. "But uncertainty over Brexit still casts a long shadow over

this sector and the rest of the economy. Politicians must finally stop the

endless fighting and come together to secure a workable solution, or we're in

danger of edging closer to a no-deal Brexit."

     Tom Crotty, Group Director of INEOS and Chair of CBI Manufacturing Council,

said that it is encouraging to see the manufacturing sector's resilience but a

top priority is to ensure frictionless trade and a Brexit transition period. 

     "It is encouraging to see the resilience of the UK's manufacturing sector

shining through as we approach the end of a difficult year. However, firms are

under no illusion that a failure by the government to secure a viable Brexit

solution would bring further uncertainty in 2019," he added. 

--MNI London Bureau; +44 203 865 3828; email: jai.lakhani@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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