The pipeline for manufacturing activity improved in November, with total order books at their strongest on record and export order books reaching their strongest since March 2019, according to the CBI’s monthly industrial trends survey.
Output volumes continued to increase at an above-average pace, with expectations pointing to an acceleration in output growth in the next three months. However, stock adequacy of finished goods deteriorated to its weakest on record, suggesting that firms are eroding their inventory positions due to a mixture of strong demand and ongoing global supply disruption. Firms anticipate that price pressures will remain acute going forward, with expectations for output price growth for the next quarter at their strongest since 1977.
- Total order books (+26 from +9 in October, long-run average of -14) improved to their strongest on record (since April 1977). Export order books (+3 from -7 in October, long-run average of -18) also improved, to their strongest since March 2019.
- Output growth in the three months to November (+17 from +15 in October) continued at a similarly firm pace to the last two months (long-run average of +3). Output increased in 12 of out 17 sectors, with growth being mostly driven by the food, drink & tobacco, electronic engineering, and chemicals sub-sectors. Manufacturers expect output growth to accelerate in the next three months (+32).
- Stock adequacy of finished goods (-16 from -13 in October) once again worsened to its weakest on record (since April 1977).
- Manufacturers anticipate that output price growth in the next three months will be robust (+67), with expectations at their strongest since May 1977.