Manufacturing Output Expected To Stabilise – CBI Industrial Trends Survey

Manufacturing output volumes fell in the three months to March, at a faster pace than in February – according to the CBI’s latest Industrial Trends Survey (ITS). But manufacturers anticipate output volumes to be broadly flat in the quarter to June, the least pessimistic outlook for 12 months.

Selling price expectations have eased considerably compared with February, though still stand slightly above the long-run average. Total and export orders remained weak in March, and stock adequacy stood close to historical norms.

The survey, based on the responses of 279 manufacturers, found:

• Output volumes fell in the three months to March, at a faster pace than in the three months to February (weighted balance of -23%, from -14% in the quarter to February). Manufacturers expect output volumes to be broadly flat in the three months to June. Output expectations had been negative since April 2025.

  
  

• Output decreased in 11 out of 17 sub-sectors in the three months to March, with the fall being driven by the food, drink & tobacco, mechanical engineering, metal products and chemicals sub-sectors.

  
  

• Total order books were reported as below “normal” in March (-27%, from -28% in February). The level of order books remained significantly below the long-run average (-14%).

  
  

• Export order books were also reported as below “normal”, to less of an extent as February (-14%, from -26%.) The balance stands above the long-run average (-19%).

  
  

• Expectations for average selling price inflation eased in March (+12%, from +26% in February), and stand marginally above the long-run average (+8%).

  
  

• Stocks of finished goods were reported as more than adequate in March (+10%, following +14% in February), and stand close to the long-run average (+12%).

  
  

Cameron Martin, CBI Senior Economist, said:

“There are signs that conditions are beginning to stabilise for manufacturers, with a long period of falling output expected to bottom out and selling price growth anticipated to slow over the next three months."

“Conditions remain challenging nonetheless, with the orders pipeline still historically weak. The conflict in the Middle East is pushing up energy costs and risks further disrupting supply chains, adding to the cost pressures already facing manufacturers.

“Navigating this uncertainty, manufacturers need to see the government delivering the longer-term reforms required to address the UK’s industrial energy cost disadvantage. This will be critical to reducing the cost of doing business – not only strengthening firms’ ability to invest, grow and create jobs - but also mitigating cost of living pressures impacting consumer confidence.”