Manufacturing output in the UK declined sharply over the three months to May, marking one of the steepest falls since August 2020, according to the latest Industrial Trends Survey from the Confederation of British Industry (CBI). The outlook remains bleak, with manufacturers expecting further declines in production over the next three months.
The survey, which gathered responses from 281 manufacturers, reported a weighted balance of -25% for output volumes in the past quarter. This matches the low recorded in December 2024 and shows a steep drop from -2% in the previous quarter. Looking ahead, manufacturers expect a continued decline in production, with a balance of -14% projected for the three months to August.
The contraction in output affected 13 of 17 manufacturing sub-sectors. The most significant drops were seen in metal products, food, drink and tobacco, and mechanical engineering.
Total order books were reported as below normal in May, with a balance of -30%, down slightly from -26% in April. This figure remains well below the long-term average of -14%. Export order books showed a slight improvement, rising to -29% from -41% last month, but also remain below the historical average of -18%.
Stock levels for finished goods were largely stable. A balance of +10% of firms said their stocks were more than adequate, compared with +13% in April. This is close to the long-run average of +12%.
Selling price expectations stayed relatively high. A balance of +26% of firms expect to raise prices over the next three months, slightly up from +23% in April. This figure remains well above the long-term average of +7%.
CBI lead economist Ben Jones said business sentiment among manufacturers remains low. He pointed to rising domestic costs and uncertainty over US tariffs as key concerns. Many firms also noted weaker customer demand.
“There are some positive signs in areas like aerospace and renewable energy,” Jones said. “But most manufacturers are still facing weak order books, and this is likely to keep output under pressure during the summer.”
He added that while the UK government has made efforts to improve trade relations—through deals with India, the US, and a reset with the EU—further steps are needed.
“Manufacturers are under pressure from high energy prices, increasing labour costs, and looming regulation, including the upcoming Employment Rights Bill,” Jones warned. “It’s vital the government avoids adding more burdens and instead focuses on boosting confidence through a strong and modern Industrial Strategy.”
He concluded: “In a time of global economic uncertainty, promoting the UK as a stable and attractive destination for investment is essential. This is key to driving long-term and sustainable growth.”
