Orders continue for UK manufacturers, but Eurozone could halt export growth

British Manufacturers continued to enjoy an increase in new orders in the three month to January; however, a tough European climate looks to stall export orders in the coming months, according to the CBI.

In its latest Quarterly Industrial Trends Survey, the CBI reports that 467 firms saw a rise in the volume of total new orders, led by strong demand at home and very modest growth in export orders.

Over the next three months, firms anticipate new export orders to be flat, acting as a drag on total orders growth, while domestic orders are set to continue rising, if at a somewhat slower pace compared to previous quarters. Output is expected to continue growing modestly.

 “British manufacturers are still heading along the right path: new orders are up, bolstered by domestic demand and more people are getting work in factories across the UK,” commented Rain Newton-Smith, CBI Director of Economics.

“Exports have grown modestly, but there is a feeling that we will not see a repeat in the next quarter, especially with the Eurozone still treading water and battling deflation.”

Numbers employed in the manufacturing sector continued to grow at a solid pace, however, access to skilled labour and capacity constraints are key factors cited as likely to limit output in the next quarter.

Looking to the year ahead, manufacturers’ plans for investment in plant and machinery have strengthened, while plans for spending on product and process innovation and training/retraining remain robust.