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UK Factories Face Deepest Order Slump Since Pandemic
23 Jul
Summary
- Manufacturing orders hit joint-fastest decline rate since Sept 2020.
- Cost pressures for manufacturers increased at the fastest pace.
- Manufacturers are squeezed by rising costs and weak demand.
British manufacturing orders have continued their decline in July, experiencing their joint-fastest deterioration rate since September 2020, a period marked by the COVID-19 pandemic. The Confederation of British Industry's (CBI) monthly order books balance remained at -45, indicating a sustained and significant drop in new orders.
Manufacturers are currently facing a dual challenge of rising costs and weakening demand. This situation forces companies to absorb the increased expenses through shrinking profit margins. The CBI's quarterly data revealed a rapid escalation in cost pressures, with unit costs rising at the fastest pace observed since October 2022.
Despite these challenges, expectations for manufacturing output over the next three months showed a slight increase. However, the ongoing cost squeeze and low demand prompt concerns about future investment and employment levels within the sector.
