December 13, 2012 12:15 pm

UK manufacturers show signs of stability

UK manufacturers’ order books looked a little better in December and companies were no longer expecting economic conditions to worsen in the coming months.

The December poll of manufacturers from the CBI, the employers’ organisation, provided signs that activity stabilised in the final month of the year after a dire October and November.

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Official figures last week showed UK manufacturing output, which makes up more than a tenth of the economy, was 1.3 per cent lower in October than in September.

Order books of the 392 manufacturers that took part in the survey rose above the long-run average for the first time in three months on the back of stronger demand within the UK. Export orders barely changed, though they had already picked up substantially between October and November.

Inflation expectations picked up to the highest level since March. Building materials, metal manufacture, and food, drink and tobacco industries were the most concerned about price pressures.

Investment goods sectors, including mechanical engineering and aerospace, expected to raise their output in the coming months. However, their optimism was offset by companies in chemicals and electrical engineering.

A net balance of 12 per cent of respondents said their order books were below normal, up from 21 per cent in November. A net balance of 11 per cent said export orders were below normal levels, up from 12 per cent the previous month.

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