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(Sharecast News) - Manufacturing output volumes fell again in the quarter to February, but expectations turned positive, according to the latest industrial trends survey released on Thursday by the Confederation of British Industry.
Output volumes fell at a broadly similar pace to January, with a net balance of -12 versus -13. Expectations improved, however, with manufacturers anticipating output volumes to rise in the three months to May and a balance of +8% compared to -19% in January.
Output fell in 16 out of 17 sub-sectors, with the fall driven by the glass & ceramics, building materials and metal manufacturing sub-sectors.
Total order books were reported as below normal, but there was an improvement on January, with a balance of -28 versus -34.
Ben Jones, lead economist at the CBI, said: "The survey paints a downbeat picture of the manufacturing sector over the last three months, which can be attributed in part to low domestic business confidence following the Autumn Budget combined with a subdued international environment.
"Manufacturers expect to raise output in the quarter ahead. But with firms having rapidly run down stocks of finished goods, it's possible that the need to re-build inventories partly explains this rebound. Order books remain weak from a long-term perspective.
"We know much of the innovation and investment necessary to drive economic growth will come from firms across the UK. Tentative signs of optimism in our survey suggest that companies are poised to work with the government to create the right environment for expansion.
"Nonetheless, the current weakness in manufacturing activity highlights how important the government's renewed focus on growth is. Many businesses are still struggling with rising prices, higher employment costs and continued pressure from stubborn energy bills.
"The government has several levers to create the right conditions for the ambitious delivery of growth set out by the Chancellor last month. An international facing industrial strategy, and matching skills to economic needs with changes to the Apprenticeship Levy, would be significant tailwinds for the manufacturing sector."
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