Manufacturers’ expectations for output growth are growing weaker despite product demand remaining high, according to the CBI’s latest trends survey.
After a first half of strong expectations for increasing output, the balance of manufacturers forecasting growth dipped to +10% in July and has been followed by a slightly more upbeat balance of +13% in August. The figures contrast with an average balance from February to June of +22%.
The CBI said demand was still strong, but manufacturers of building materials suffered a -11% deterioration in August.
“Manufacturers are being kept busy, and their order books are still healthy, but they forsee weaker output growth for the rest of the year,” said CBI principal economist Lai Wah Co.
“While price pressures in the manufacturing sector have not gone away, the Bank of England can take some comfort from the expected slowdown in output growth as recent monetary policy appears to be having its desired impact.”
