Manufacturing remains ‘severely depressed’ as slow recovery starts

British manufacturing remains “severely depressed” as new orders are still significantly below normal, according to new figures.

The CBI’s latest industrial Trends Survey showed that output volumes tumbled by 46% in the three months to August.

However, it said this highlighted the start of a recovery, as output moderated from a survey-record decline of 59% in the three months to July.

“This has been another difficult month for manufacturers,” said Anna Leach, deputy chief economist at the CBI.

“Activity continues to be poor and order books severely depressed, although the worst of the decline seems to be behind us.

“It is a relief to see the pressure on manufacturers starting to ease.

“As the sector looks to rebuild from the economic shock, the Government must consider additional ways to support this sector to help reinforce a recovery, such as grants and further business rates relief.”

The survey of 278 manufacturers found that output volumes slumped in 16 of 17 major sectors, with the mechanical engineering, food and drink, and motor vehicle categories particularly affected.

Manufacturers said they expect output to fall at a much slower pace in the next three months, according to the survey.

Tom Crotty, group director at Ineos and chairman of the CBI Manufacturing Council, said: “The survey results show some early signs of the manufacturing downturn bottoming out, but it is clear that many firms remain in distress and the sector looks set for a challenging autumn.

“As the Government looks to economic recovery, it is crucial that it continues to support firms through the difficult months ahead, and work with us to build a more resilient manufacturing sector.”