Manufacturing output grows but confidence falls – CBI report

UK manufacturing output grew at its fastest pace in ten months over the quarter to May, but output still failed to keep pace with demand, according to the latest CBI monthly industrial trends survey.

The balance of firms expecting to raise selling prices in the three months ahead increased slightly, moving closer to March’s record high, but confidence showed a further decline in the quarter to May (-30%), while investment plans for buildings (-6%) and plant and machinery (-2%) remained weak.

Anna Leach, deputy chief economist at the CBI, said: “Manufacturers have reported output growth and order books improving in May. But cost pressures remain acute and are pushing manufacturers to raise prices. Sentiment among manufacturers has fallen in recent months as the outlook has deteriorated following Russia’s invasion of Ukraine, and investment plans are being scaled back.

“Rising costs are hitting consumers and businesses alike, and the government can and must take action now to support the economy through the challenging months ahead. Putting pounds in the pockets of people already struggling should not be delayed, and must be coupled with action to support firms’ cashflow and to stimulate investment.”

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