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Manufacturing activity remains strong but supply chain issues grow – CBI

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UK manufacturing activity remained strong in December but stock adequacy hit another record low, according to a survey released on Monday by the Confederation of British Industry.
The CBI’s total orders balance nudged down to +24 from a survey record high of +26 in November, but was ahead of expectations for a reading of +20.

At the same time, the gauge for stock adequacy of finished goods worsened to its weakest on record for a second month in a row, to -24% in December from -16% the month before. Respondents also said they expect price pressures to remain acute in the next three months.

CBI deputy chief economist Anna Leach said: “UK manufacturing demand remains strong, and output accelerated to meet this demand in December. However, behind the scenes, firms are battling pressures on a number of fronts.

“Stock adequacy of finished goods worsened to an all-time low for the second month in a row, and continued expectations for sharp price growth are a further challenge for the sector.

“The spread of the Omicron variant will have been a blow to business confidence. However, firms will welcome the Government’s decision to move from isolation to testing as a method of controlling the virus without unduly impacting their ability to operate.”

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