Manufacturer output volumes in the three months to June fell at the fastest rate on record (since July 1975), having slightly surpassed the recent record set in May 2020. That’s according to the latest CBI monthly Industrial Trends Survey.
The survey of 360 manufacturers found that output volumes declined in 15 of 17 sub-sectors, with the headline drops in output primarily driven by the motor vehicles and transport equipment, mechanical engineering, and metal products.
Total order books remained poor by historical standards, despite improving slightly on last month. Meanwhile, export orders books worsened on the previous month, falling to their lowest on survey record (since April 1977).
Looking ahead, manufacturers expect the pace of decline in output volumes to slow in the next quarter. Firms anticipate that output prices in the next three months will fall at a slower pace.
Anna Leach, CBI Deputy Chief Economist, said: “The UK manufacturing sector remained in a deep downturn in June due to the ongoing COVID-19 crisis. Output volumes declined at a new record pace and export order books fell to an all-time low, reflecting the significant fall in demand in the UK and abroad. Firms are again hoping that this will ease somewhat in the next three months.
“The Government has already undertaken a huge amount of work to provide financial lifelines to businesses throughout this unprecedented period. With firms having been encouraged to restart operations, the Government must continue to engage with the sector to understand their specific concerns and provide support as needed.”
Tom Crotty, Group Director, INEOS and Chair of the CBI Manufacturing Council, said:
“The COVID-19 crisis has been hugely challenging for the manufacturing sector, and these figures reflect the tough circumstances faced by firms across the country.
“Government support measures have been a relief to the sector and have undoubtedly saved jobs during this crisis. As well as continuing to support the sector during the current pandemic, it is critical that the government works with firms to develop a long-term plan to grow a resilient UK manufacturing sector focused on skills, productivity, and sustainability.”
In other CBI news: Lord (Karan) Bilimoria has been elected as the new CBI President. John Allan CBE, the outgoing CBI President, becomes the organisation’s Vice-President.
Indian-born Lord Bilimoria was elected by an overwhelming majority of CBI members who participated in the ballot, becoming the first President in the organisation’s history from a (BAME) Black, Asian and Minority Ethnic background.
He is one of the country’s leading entrepreneurs. He founded Cobra Beer in 1989 – and remains its Chairman – and was also founding Chairman on the UK-India Business Council. A former Chancellor of Thames Valley University (now the University of West London); he was the youngest University Chancellor in the UK when appointed. In 2014, he was appointed as the 7th Chancellor of the University of Birmingham. He is also Chair of the University of Cambridge Judge Business School Advisory Board. Lord Bilimoria has been an Independent Crossbench Peer in the UK House of Lords for 14 years.