Factory orders fall due to rising import costs and Brexit uncertainty – CBI
2 min read
Factory orders driven by the food and drink sector have slowed down over the last month due to the rising cost of imports and Brexit uncertainty, the CBI has revealed.
Imports grew at their weakest rate in September since the start of the tax year, the CBI’s monthly survey found.
The CBI said its monthly survey of manufacturers revealed a slowdown in orders that dragged back its measure for new contracts to +7 from +13 in August.
Rising import prices has also affected output growth, with fewer orders from the food and drink sector – one of the industries suffering from rising import prices the most.
CBI economist Anna Leach said the sector was still in rude health and likely to continue growing at above the historic trend for some time.
“Manufacturers continue to report solid growth in output, while total order books and export order books are holding firm,” she said.
“Expectations for selling prices were largely in line with the previous month, but price pressures do appear to have moderated somewhat since earlier in the year.”
However, manufacturing enjoyed a boost after a gloomy first half of the year, according to the CBI.
Output had grown despite gloomy data from the Office of National Statistics showing manufacturing contracting for the first half of 2017.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “The CBI’s total orders balance fell to its lowest level since April, but it still is consistent on past form with year-over-year growth in manufacturing output of about 4%.
“We doubt that manufacturing is growing that quickly – the relationship between the survey and official data has been poor lately – but it’s clear that the sector is is enjoying a rare good spell.”
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