The manufacturing sector stabilised somewhat in February, reporting little change on January's muted performance, according to the CBI Industrial Trends Survey.
The survey of 497 manufacturers found that total order books remained steady after a fall in January, whilst export orders saw a very slight improvement from the previous month. Both now stand at around average levels.
Output volumes were flat over the past three months, a very marginal improvement on the previous quarter. Expectations for production over the coming quarter are again positive, albeit only somewhat above average and a little weaker than last month's expectations.
Manufacturers expect a small fall in average selling prices in the next three months, with the metals, food & drink and chemicals and mechanical engineering sectors all expecting a drop in prices.
Rain Newton-Smith, CBI Director of Economics, said: "Demand and output have remained relatively unchanged from January's performance. The challenging outlook for the manufacturing sector has stabilised a little, with sterling having depreciated, but Britain's manufacturers are still facing a difficult global situation.
"Next month's Budget gives the Government a good opportunity to give a helping hand to the manufacturing sector, by tackling the UK's outdated Business Rates regime, and supporting investment through increasing the scope of capital allowances.
"Despite the turbulence in emerging markets, economies such as China still represent a huge opportunity for British industry. A National Exports Commission, bringing businesses, trade experts and politicians around the table to advise on the policies needed to boost our export performance, would support manufacturers in selling their goods to key markets around the globe."
- 12% of firms reported total order books to be above normal, and 29% said they were below normal, giving a balance of -17%. This was around average (-15%), and similar to January (-15%)
- 10% of businesses said their export order books were above normal, and 28% said they were below normal, giving a rounded balance of -19%. February's level was an improvement on the previous month (-22%), and around average (-20%)
- 27% of firms said the volume of output over the past three months was up and 27% said it was down, giving a flat balance of 0%.
- Businesses again expect output to grow in the coming quarter, with 30% predicting growth, and 19% a decline, giving a balance of +11%
- Average selling prices are expected to fall marginally over the next three months (-3%)
- 15% of firms said their present stocks of finished goods are more than adequate, whilst 4% said they were less adequate, giving a rounded balance of +12%, near the long-run average (+14%).