Britain's manufacturing sector continues to face significant challenges as production levels fell again during the three months leading up to February, according to the latest industrial trends survey from the Confederation of British Industry (CBI). The data reveals a weighted balance of 14 percent decline in manufacturing output, following an even faster period of deceleration in the previous quarter.
Widespread Decline Across Manufacturing Subsectors
The CBI survey, which gathered responses from over 300 of the UK's largest manufacturing firms, indicates that output volumes decreased in 13 out of 17 subsectors. Particularly affected were metal products, food and drink, and tobacco industries, all experiencing especially difficult trading conditions over the three-month period.
Manufacturing executives anticipate output volumes will continue to fall at a similar pace over the coming three months, as persistent pressures from elevated energy costs and a challenging international trade environment show little sign of improvement.
Order Books Remain Below Normal Levels
The analysis found that a majority of manufacturing firms reported total order books being "below normal" in February. Export orders also declined, though at a slower rate compared to the previous survey conducted in January.
Cameron Martin, the CBI's senior economist, commented on the findings: "The downturn in manufacturing output eased in February, after a downbeat period around the turn of the year. However, many firms continue to report customers holding back amid low confidence and elevated cost pressures."
Energy Costs and Trade Uncertainties Weigh Heavily
Britain's manufacturing industry has spent much of the past year confronting multiple challenges, including an unpredictable trading environment, cost inflation, and particularly high energy prices. The energy-intensive sector faces some of the highest industrial electricity prices in the developed world, prompting industry body Make UK to call for green levies to be removed from all manufacturers' energy bills.
Simultaneously, exporters—including Britain's substantial car manufacturing sector—have been forced to contend with a highly unpredictable trade environment. This uncertainty has been largely driven by Donald Trump's unpredictable tariff policies and indications that the European Union plans to adopt a more protectionist approach to trade.
Government Action Needed to Restore Confidence
Martin identified the government's upcoming spring statement as a crucial opportunity for ministers to "restore confidence" among manufacturing sector participants. He emphasized that manufacturers want to see the government focused on accelerating industrial strategy delivery, addressing skills shortages, and lowering the cost of doing business by bringing forward energy costs support.
"Tackling punitive energy costs will strengthen competitiveness, ease cost of living pressures, and help boost demand across the economy," Martin added, highlighting the interconnected nature of manufacturing challenges and broader economic conditions.
