U.K. Manufacturing Tepid as New Orders Slump at Home and Abroad

(Bloomberg) --

British manufacturers recovered slightly in August but export demand remains weak, according to a survey by the Confederation of British Industry.

On balance, respondents said their order books were “below normal.” That was still an improvement on last month, which was the worst for orders in over a year.

Small to medium businesses suffered more than large ones. Around half of those with fewer than 500 employees said order numbers were below par, compared to just 6% of larger companies. Industrial output was dragged heavily by the paper, printing and media sub-sector, but boosted by pharmaceuticals and plastics, which reported gains.

Manufacturing has been hit particularly hard by the looming prospect of Britain leaving the European Union without alternative trading arrangements in place. In the second quarter the sector contracted by 2.9%, its most in over a decade, reflecting sluggish global economic growth and the unwinding of stockpiling after the original March Brexit deadline was delayed.

Almost all responding manufacturers expect prices to stay the same in the coming months.

To contact the reporter on this story: Eddie Spence in London at espence11@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Brian Swint, Andrew Atkinson

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