Order books in March remained well above their long-run average, and their levels of late last year, albeit a little lower than last month. While 18 percent reported total orders were above normal, 26 percent said they were below. The resulting balance of -8 percent is stronger than the long-run average for this measure (-17 percent).
Similarly, at -11 percent, export demand also weakened, but remained considerably above its long-run average (-21 percent).
However, expectations for output price inflation have picked up. A balance of +24 percent of firms expect to raise output prices in the coming quarter, the highest since June 2011 (+27 percent).
Ian McCafferty (pictured), CBI Chief Economic Adviser, said: “The recovery in the manufacturing sector seems to be building some momentum. Firms again expect a strong rise in output over the next three months, on the back of above-average order books. However, expectations for output price inflation have also moved higher, most probably reflecting the recent rise in oil prices. Any further rise in oil prices would be a significant concern, given the additional cost burden this would place on UK manufacturers and the knock-on effects it could have on the nascent recovery.”
Stocks of finished goods remained above adequate (+17 percent). The balance has changed little since November 2011, staying broadly in line with the long-run average (+14 percent).