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UK factories face order slump as costs bite
19 Feb
Summary
- Industrial orders significantly declined in February, showing a balance of -28.
- Manufacturers grapple with surging energy expenses and trade tariff impacts.
- Expected price pressures remain elevated, reaching their highest since early 2023.
British industrial orders have seen a substantial decline for February, with the Confederation of British Industry reporting an order book balance of -28. This figure indicates a continued downturn, remaining well below the long-term average. Manufacturers, who contribute significantly to the UK's economic output, are facing a challenging environment marked by soaring energy costs, the impact of international trade tariffs, and elevated interest rates.
Compounding these issues, price pressures within the manufacturing sector remain intensely high. The gauge for expected prices stood at +26 in February, following a surge to +29 in January, reaching levels not seen since early 2023 when the UK experienced an energy price shock. Senior economist Cameron Martin noted that many businesses reported customer hesitancy due to low confidence and the ongoing burden of high costs.
The findings are based on a survey of 305 manufacturers conducted between January 26 and February 12. The results underscore the persistent economic headwinds affecting the UK's industrial base.
