British manufacturers are to cut back on output, lobby groups claim.
Over the coming quarter manufacturing output in the UK is to fall at rates not seen since 1980, as a monthly survey of industrial trends has shown demand for manufactured goods has fallen below par this March.
The research, which was carried out by the Confederation of British Industry (CBI), also indicates prices will fall over the next three months.
Ian McCafferty, chief economic adviser for the CBI, said: “The past six months have proved especially tough for many UK manufacturers, who have been hit by plunging domestic and global demand. Although firms have cut output aggressively in response to the recession, stock levels are still too high relative to expected demand.”
When asked about their expectations for output volumes over the next three months, 56% of manufacturers said they would fall. Only 8% of firms expect output volumes to rise.
A balance of 58% of respondents claimed total order book levels were below normal.
Firms have cut output in response to falling demand, but 31% of manufacturers say their stocks are still more than adequate to meet demand – the highest since it was matched in January 1981.
© Crimson Business Ltd, 2009