UK Exports: Manufacturers Expecting Lowest Orders For One Year

The economic malaise enveloping the Eurozone is having a drag on UK manufacturing, with factory export orders falling at the fastest rate since January 2013 in the three months to October.

The pace of growth in both orders and output has slowed to its lowest pace in a year, with manufacturers expecting the trend to continue over the next quarter, too.

The Confederation of British Industry's (CBI) industrial trends survey showed that order books slid by the fastest rate since July 2013, with the lobby's optimism index tumbling to its lowest rate of the year to date.

The CBI's Director of Economics Rain Newton-Smith said: "It's disappointing that a sluggish exports market has taken some of the steam out of manufacturing growth, which was going from strength to strength throughout most of this year.

"However, growth in orders and output is expected to continue ahead, albeit with expectations moderating, and domestic orders have continued to rise at a healthy pace. And it is encouraging that job numbers are growing.

"Nevertheless, the manufacturing sector is clearly facing headwinds. Global political instability, mounting concerns about weakness in the Eurozone and recent rises in Sterling are all weighing on export demand."

Just 31% of businesses reported an increase in new orders over the third quarter of 2014, a decrease of 21%. The general employment trend highlighted by the survey is positive, but the recovery is slowing, with 27% of manufacturers saying employment was up but that rise is down 12% on the preceding quarter.

Looking ahead, 29% of UK manufacturers expect orders to increase over the next three months.