Manufacturing orders increase again in UK

Things are starting to look up slightly for the UK manufacturing industry, as the Confederation of British Industry reported orders rose to their highest in November since August, after a bleak previous month. Although these figures were still lower than longer-term averages, the November numbers were better than predicted.

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Uncertainty from Brexit

Since the referendum in 2016, Brexit has caused uncertainty in almost every area of the UK economy. In 2019, with the extension of the March 29th and October 31st deadlines, the Brexit threat that has been looming over the UK has taken a toll on both consumer and business confidence.

October saw orders drop to the lowest levels in nearly a decade as the country faced a possible No Deal Brexit with the October 31st deadline. However, the avoidance of the no-deal gave Britain’s manufacturers some reprieve, with the survey of industrial trends from the CBI noting that orders increased to the highest point since August. The CBI’s survey showed order balance rose from minus 37 in October, up to a figure of minus 26 in November. There was also an increase in export orders, which in October were at the lowest level following the financial crisis. Deputy Chief Economist at the Confederation of British Industry, Anna Leach, said the dense fog surrounding the uncertainty of Brexit and a no deal was lifting, pressure still remains on the manufacturing sector and she cited output volume, which continued to fall in November at a comparable rate to October.

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Future forecast

Manufacturing areas such as consumer goods, electronics, chemical industry, printing & publishing, pharmaceutical industry, industrial equipment and paper industry have all been affected over recent years and uncertainty continues with the general election in December followed by the January 31st 2020 Brexit deadline. The forecast for manufacturing is still looking fairly low for the next 12 months, but for companies all over the UK, from a large motor vehicle manufacturer to a smaller injection moulding company such as for example, the November order upturn is certainly welcome news.

Although Anna Leach described the outlook for the sector as “precarious” and the future far from certain for the industry, there is no doubt the boosts in areas such as aerospace and mechanical engineering provide the whole manufacturing industry with some hope for the future.

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