Britain's manufacturers have been stuck in a rut for the past three months, despite signs of a revival in other parts of the economy, according to the latest survey from the CBI.
Output from the crucial industrial sector, which the chancellor hopes will spearhead an export revival, was flat in the runup to June.
Stephen Gifford, the CBI's director of economics, said: "manufacturers are treading water with domestic and export orders stagnant.
While an expected improvement in conditions at home and abroad should lead to better prospects for manufacturers, the business climate still remains quite fragile."
Small and medium-sized firms reported that export orders had slumped to their lowest level since January 2010. Overall, 11% of firms said their export order books were above normal; 33% said they were below – a balance of -22%.
The chancellor, George Osborne, set a target of doubling exports to £1 trillion by 2020, but with the UK's major market, the eurozone, 18 months into a recession, progress has been slow.
The CBI said cars, aerospace and transport equipment had been one of the few export drivers in the survey. Many manufacturers expect their fortunes to improve over the next three months, but they had pinned their hopes on a strong revival that failed to materialise.
"Firms have tempered their expectations somewhat, although they still expect a modest pick-up in output over the coming three months," the CBI said.
Stockpiles of finished products were also at their highest levels since October 2011 – above the long-run average, suggesting disappointed firms may have been left with unsold goods.
Meanwhile average prices are expected to be flat over the next three months. The CBI's monthly industrial trends survey covers more than 400 firms in the industrial sector. Other recent snapshots of the sector, including from the manufacturing group EEF, paint a more upbeat picture.
The purchasing managers index for manufacturing, published this month, signalled the fastest growth in more than a year.
guardian.co.uk
Output from the crucial industrial sector, which the chancellor hopes will spearhead an export revival, was flat in the runup to June.
Stephen Gifford, the CBI's director of economics, said: "manufacturers are treading water with domestic and export orders stagnant.
While an expected improvement in conditions at home and abroad should lead to better prospects for manufacturers, the business climate still remains quite fragile."
Small and medium-sized firms reported that export orders had slumped to their lowest level since January 2010. Overall, 11% of firms said their export order books were above normal; 33% said they were below – a balance of -22%.
The chancellor, George Osborne, set a target of doubling exports to £1 trillion by 2020, but with the UK's major market, the eurozone, 18 months into a recession, progress has been slow.
The CBI said cars, aerospace and transport equipment had been one of the few export drivers in the survey. Many manufacturers expect their fortunes to improve over the next three months, but they had pinned their hopes on a strong revival that failed to materialise.
"Firms have tempered their expectations somewhat, although they still expect a modest pick-up in output over the coming three months," the CBI said.
Stockpiles of finished products were also at their highest levels since October 2011 – above the long-run average, suggesting disappointed firms may have been left with unsold goods.
Meanwhile average prices are expected to be flat over the next three months. The CBI's monthly industrial trends survey covers more than 400 firms in the industrial sector. Other recent snapshots of the sector, including from the manufacturing group EEF, paint a more upbeat picture.
The purchasing managers index for manufacturing, published this month, signalled the fastest growth in more than a year.
guardian.co.uk
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