Export orders fall to 18-month low amid political uncertainty
Factory export order books have weakened to their worst level since January 2013 amid political uncertainty at home and abroad, the CBI has said.
Its latest industrial trends survey of 488 manufacturers between August 20 and September 10 found that output remained solid in the last quarter and should strengthen further in the coming three months.
But firms saw total order books fall below "normal" levels, with the impact on exporters particularly severe.
Economists said sterling's strength and the eurozone's continued economic stagnation were other factors, alongside the uncertainty caused by the Scottish referendum and the crisis in Ukraine.
CBI deputy director general Katja Hall said: "Against a backdrop of acute political uncertainty at home and abroad, exports orders for UK manufacturers are faltering, which is disappointing.
"However, it's encouraging that output growth has remained solid and firms expect production to rise strongly in the next quarter."
The survey found that 34% of firms saw the volume of output rise in the last three months, while 19% said it fell, giving a balance of plus 15%.
It added that 14% of firms said their export order books were above normal and 38% said they were below normal, giving a balance of minus 24%, against a long-run average of minus 20%.
Maeve Johnston, UK economist at consultancy Capital Economics, said: "The survey provides further evidence that sterling's strength and the eurozone's fragile economic recovery are proving increasingly tough obstacles for the export-sensitive manufacturing sector to overcome."
But she added that a sustained recovery in domestic demand and slightly stronger growth in the eurozone next year should ensure the manufacturing sector's recovery remained fairly robust on the whole. Fears over the slowing pace of Britain's manufacturing sector were raised earlier this month after figures from the Office for National Statistics (ONS) showed growth of 0.3% for the second month in a row.
Figures for Northern Ireland yesterday showed growth in manufacturing. The index of production for the second quarter showed an increase in output of 1.9%. Output from the production sector had increased by 5% over the last four quarters, compared to the previous 12 months.
And the best-performing sectors were manufacturing, which had grown 5.8% over the last four quarters, followed by electricity, gas, steam and air conditioning supply, which had seen output grow by 1.5%, and water supply, sewerage and waste management, which had grown by 1.4%.
However, those increases were off-set by a fall in mining and quarrying of 4.2%.