The UK's manufacturing sector saw
a widespread fall in output volumes
in the three months to June, with the balance
for reported output declining to its
weakest since 2020 according to the CBI's
latest Industrial Trends Survey (ITS). Manufacturers
expect output volumes to fall again in the
three months to September.
Volumes of total and export orders were
reported as below normal in June, with total order
books standing at their weakest since September 2020. Selling
price expectations eased in June, relative to May,
but remain above historical norms. Stocks of finished goods
were seen as adequate in June, broadly in line with the long-run
average.
The survey, based on the responses of 288 manufacturers,
found:
-
Output volumes fell in the three months
to June, with the balance weaker than at any time since the
quarter to August 2020 (weighted balance of -33%, from -23% in
the quarter to May). Manufacturers expect output volumes to
fall further in the three months to September (-31%).
-
Output decreased in 12 out of 17
sub-sectors in the three months to June, with the
fall being driven by the food, drink & tobacco, mechanical
engineering, paper, printing & media and metal products
sub-sectors. No sub-sectors recorded an increase in
output.
-
Expectations for average selling price
inflation remained elevated in June, though
have eased relative to May (+22%, from +38% in May).
Expectations for selling price growth remain well-above the
long-run average (+8%).
Cameron Martin, CBI Senior Economist,
said:
Manufacturers are facing an increasingly difficult trading
environment, with order books now at their weakest
since 2020 and output continuing to fall. While selling
price expectations have eased from their peak in May,
they remain elevated, highlighting the cost pressures
still facing the sector.
The agreement between Iran and the US to reopen the Strait
of Hormuz will hopefully alleviate some of
the challenges that have weighed on manufacturers
in recent months. But it will take time for energy prices and
supply chains to normalise even under the
best of circumstances, while the potential for
further instability is clear. This
leaves firms navigating uncertainty on both global and
domestic fronts, at a time when weak demand and fragile
confidence are already weighing on growth prospects.
Manufacturers have responded to recent instability by
prioritising resilience over expansion, increasing inventories,
diversifying suppliers and investing in operational
efficiency. While these have helped build resilience,
they have also diverted resources away from the
investment needed to drive growth and productivity.
Political uncertainty risks holding back investment at a time
when manufacturers are already grappling with high
costs and weak demand. The Prime Minister's resignation
should not distract from the urgent need to go further in
reducing industrial energy costs and removing barriers to
trade with our closest trading partners in the
EU. Lowering the cost of doing business must remain central
to the government's ambitions, helping manufacturers to invest
and grow.
Full results are in the
attachment accompanying this release.
23 JUNE 2026
Notes to Editors:
The June 2026 CBI Industrial Trends Survey was
conducted between 26 May and 12 June,
with 288 manufacturing firms responding.
A balance is the weighted percentage of companies reporting an
increase minus those reporting a decrease.
