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UK manufacturers were hit by a dip in orders this month, according to a major survey which suggests the shine may be coming off a sector that has been given a boost from the falling value of the pound.
The Confederation of British Industry’s latest healthcheck of the sector, which survey’s nearly 400 factories, reported a slight dip in total new orders in April to a balance of +4, lower than a forecast of +5 and declining from +8 in March. It was the weakest reading since December and was coupled with a fall in exports orders and business confidence this month.
Britain’s factories have started the year with a bang, reporting their highest confident in over four decades in the first three months of 2017, while foreign demand surged to a six-year high, according to the CBI.
Sterling’s post-Brexit decline has helped boost UK export competitiveness in non-EU markets at the fastest pace in the CBI survey’s history, while also raising import costs for firms.
“The combination of the weak pound and recovering commodity prices means that cost pressures continue to build, and manufacturers report no sign of them abating over the near-term”, said Rain Newton-Smith, chief economist at the CBI.
Howard Archer at IHS Global said: “the challenges facing the manufacturing sector are picking up and will likely to intensify as the year progresses.”