Food and drink manufacturers boost UK output

By James Ridler contact

- Last updated on GMT

Food and drink sector is leading the UK manufacturing recovery
Food and drink sector is leading the UK manufacturing recovery

Related tags: Drink manufacturers, United kingdom

Rising output reported by food and drink manufacturers has boosted the UK manufacturing sector, despite lacklustre export demand, according to a new Confederation of British Industry (CBI) report.

Production from UK food and drink manufacturers picked up in the past three months, after flooding hit a number of factories earlier this year.

CBI director of economics Rain Newton-Smith said that orders had been increasing in comparison with the start of the year.

However, Newton-Smith said: “Domestic and global uncertainty remains high, alongside lacklustre export demand.

Despite recent choppiness in emerging markets, China and India remain significant sources of potential demand.​”

He also said that a partnership between manufacturers and the government was needed to help identify “long-term opportunities and trends, particularly in digital”.

‘Developing the right skills’

“A greater focus is also required on developing the right skills in the sector, managing energy costs, and encouraging further research and development investment.”

While food and drink manufacturers were seeing a growth in orders, the CBI said that manufacturing output as a whole was little changed in the past three months.

Over the next three months, 32% of companies surveyed expected that output would rise compared with 12% that expected it to decrease.

Export orders fell according to 29% of the manufacturers asked, while 15% reported a rise.

Total orders had taken a greater dip since the CBI’s last report, falling from 4% in April this year to 8%.

The findings emerged from the CBI’s latest monthly industrial trends survey, which surveyed business managers in 489 companies nationwide.

Shut down by flooding

United Biscuits’ Carlisle site​ was one of the many factories that were shut down by flooding at the beginning of the year.

The site managed to reopen after more than 400 of its employees, contractors and suppliers helped to finish the clean-up and restart the production lines.

Meanwhile, the UK economy is predicted to grow more slowly than previously forecast over the next two years as global economic risks heighten, according to the CBI.

The organisation – which represents 190,000 businesses, together employing nearly 7M people, warned uncertainty ahead of the EU referendum was weighing on investment plans.

CBI director-general Carolyn Fairbairn said: “A dark cloud of uncertainty is looming over global growth​, particularly around weakening emerging markets and the outcome of the EU referendum, which is chilling some firms’ plans to invest.”

CBI survey – at a glance

  • 12% balance of businesses reported rise in output
  • 24% of businesses reported fall in total orders
  • 29% of businesses reported a fall in export orders
  • 15% of businesses reported a rise in export orders

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