Belfast Telegraph

Manufacturing output recovers – but Brexit and trade clouds gather

Output grew at the fastest pace since December 2017 over the three months to June.

British manufacturing order books recovered in the three months to June, but economists have warned that the outlook remains clouded by Brexit and the threat of a global trade war.

The Confederation of British Industry (CBI) industrial trends survey of 388 manufacturers showed that output grew at the fastest pace since December 2017 over the period, broadly in line with expectations.

Growth was driven by sectors including food, drink and tobacco and mechanical engineering, the CBI said.

The survey showed that a balance of 13% of order books were above normal and 9% of export order books remained above normal.

The figures represent a bounce back from earlier in the year.

Manufacturers expect output growth to slow slightly in the coming quarter. A balance of 18% expects output growth to slow slightly.

Export orders remained stable and above average, in line with the past 16 months and the CBI said that it expects manufacturers to continue to benefit from “robust” external demand and the weak pound.

However, it added that overall economic growth is expected to remain “subdued” due to weak consumer income and “investment being held back by ongoing uncertainty”.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, added: “Investment in the manufacturing sector likely will remain subdued, given that the medium-term outlook remains clouded by Brexit and the threat of a global trade war.

“As a result, capacity constraints likely will bite soon, preventing a prolonged period of strong growth in manufacturing output from taking hold.”

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