Manufacturing output is expected to fall to its lowest level since the financial crash as the Covid-19 outbreak gains pace in the UK.
The latest CBI industrial trends survey of 288 manufacturers shows that both total and export order books worsened considerably in February.
Manufacturing output volumes fell in the three months to March but at a roughly similar pace to February. This marks the sixth month in a row of falling output in this sector.
Nine out of the 17 sub-sectors reported output expanding, led by chemicals, food & drink and tobacco and electronic engineering sub-sectors.
However growth there was offset primarily by a sharp drop in output in motor vehicles and transport equipment sub-sector.
Output prices are expected to rise in the next three months.
Anna Leach, CBI deputy chief economist said: “The manufacturing sector is facing unprecedented challenges due to Covid-19, such as widespread disruption to supply chains and weakening demand due to domestic containment measures.
“With expectations for output set to fall in the coming months, it’s now more important than ever manufacturers get the support they need.
“The Chancellor’s offer of substantial payroll support, fast access to cash and tax deferral will help prevent job losses and alleviate some strain. But all measures must be constantly assessed to ensure the UK’s manufacturing sector emerges from this crisis with the minimum possible damage.”
Tom Crotty, group director of INEOS and chair of the CBI Manufacturing Council, said: “Given the hugely challenging circumstances faced by all businesses across the country as a result of coronavirus, it is not surprising that manufacturers are also feeling the impact. The Government’s various support measures have been welcome, but it will be essential to keep its response under continuous review to ensure that firms get through the crisis.
“The outbreak of coronavirus has shone a light on the world-leading expertise and capability of UK manufacturing. The inspiring reaction by manufacturers to the Government’s drive to produce thousands of ventilators and other essential products and materials is testament to the quality of firms and people in our sector
"Manufacturers stand ready to help the country through the current crisis in any way they can."
