CBI states UK factory output fell at fastest rate since records began

The CBI noted that UK factory output had fallen at its fastest pace since records began in 1975, during the first three months of the year.

The pressure group stated that 360 firms responded to their survey between late Mate and mid June, and of that number, an unsurprising 74% said they had produced less in the three months to the end of March.

The CBI said the negative balance, between gross increase and decrease in factory outputs, reflected a 57 percentage point dip -which is the largest fall since records began in 1975. While most subsectors of manufacturing reported falls, the greatest declines were seen in vehicle, transport, mechanical engineering and metal products.

Despite a modest recovery in June, the CBI noted that order books remained weak, with 71% of firms reporting that order books were below normal levels for the time of year – down 58 points in June versus negative 62 points in May. Similarly, export books were at their lowest level on record, with a mere 2% of respondents stating that their output was better than normal.

Commenting on the results, CBI Chief Economist Anna Leach stated:

“The UK manufacturing sector remained in a deep downturn in June due to the ongoing Covid-19 crisis. Output volumes declined at a new record pace and export order books fell to an all-time low, reflecting the significant fall in demand in the UK and abroad. Firms are again hoping this will ease somewhat in the next three months.”

“The government has already undertaken a huge amount of work to provide financial lifelines to businesses throughout this unprecedented period. With firms having been encouraged to restart operations, the government must continue to engage with the sector to understand their specific concerns and provide support as needed.”

Further to the CBI’s announcement, the Employers’ Organisation stated that no evidence had been found in its monthly industrial trends survey to suggest that the recovery in high street and online spending had filtered through into greater demand for British manufactured goods.

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Senior Journalist at the UK Investor Magazine. Also a contributing writer at the Investment Observer, UK Property Journal and UK Startup Magazine. Postgraduate of King's College London with a specialisation in Business Ethics. Interested in Development Economics and David Hume.