UK manufacturers saw the worst stock shortages on record in August, while manufacturing output growth eased, according to a survey released by the Confederation of British Industry (CBI).
The CBI’s index for stock adequacy declined to -14 from -11 in July, coming at its weakest level since records began in 1977 and marking the third month in a row in which a new record-low outturn was set. The weakness was driven by the electronic engineering and plastic products sub-sectors. Meanwhile, the CBI’s index for industrial output growth in August fell from a record high of +37 in July to +22.
“Manufacturing activity remained strong this month, with total order books remaining firm and most sub-sectors reporting rising output yet early signs from the data suggest that growth in activity may have peaked,” CBI lead economist, Alpesh Paleja, said. “It is notable that stock adequacy deteriorated to a new record low for the third consecutive month. Many firms are feeling the pinch from ongoing supply chain disruption, which also partly explains the continued strength in pricing pressures. Ongoing disruptions could choke off future manufacturing growth. It’s therefore vital that businesses and the government continue to work together to smooth over some of the frictions in supply chains and the wider sector, until activity settles back down to normal levels.”