UK manufacturing activity continued to decline in the three months October but fell at their slowest pace since March despite a resurgence in coronavirus cases, a new survey showed.
Output dropped in 10 of the 17 manufacturing sub-sectors monitored by the CBI’s industrial trends survey, with the aerospace sector leading the drop as the pandemic continued to hammer the airline industry.
The CBI’s quarterly gauge of business optimism was broadly unchanged compared to the previous quarter, while export sentiment fell at a slightly quicker pace.
“Conditions remain tough in the manufacturing sector, with output and orders still down on the quarter, albeit to a lesser degree,” said CBI chief economist Rain Newton-Smith.
“The government must stay on the front foot when it comes to providing support for the sector and wider economy.”
Total new orders were largely flat in the three months to October following a sharp drop the previous quarter and five total successive quarters of decline, the survey showed.
Domestic orders increased slightly during the period, while exports fell at a considerably slower pace than the previous quarter.
Headcount also declined at a slower pace compared to the previous three months, when headcount fell at the sharpest pace since April 2009.
The CBI’s monthly order book balance — the difference between factories reporting a rise and a fall in orders — increased in October to -34, compared to -48 the previous month.
This represents the index’s best reading since March, and is above the median forecast of -45 by economists polled by Reuters.
“The government must stay on the front foot when it comes to providing support for the sector and wider economy,” said Newton-Smith.
“It is more crucial than ever for the government to listen to the experiences and concerns of businesses and ensure support matches the tightness of local lockdowns,” she added.