Manufacturers stockpiling at record rates

UK manufacturing stocks rose at a record pace in the quarter to April despite activity in the sector growing modestly, according to the latest CBI Industrial Trends Survey.

CBI chief economist Rain Newton-Smith. Picture: Contributed

Stocks of raw materials, work in progress, and finished goods grew at their fastest respective paces yet, suggesting that Brexit contingency planning was a priority for UK manufacturers.

The survey showed that output growth sped up slightly in the three months but remained “modest” overall.

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The sector expects new domestic and export orders to fall in the coming quarter, as the proportion of firms citing “political/economic conditions abroad” as a key factor limiting exports hit its highest level since January 1983.

CBI chief economist Rain Newton-Smith said: “It’s encouraging that securing a Brexit extension has removed the cliff edge of a no-deal for now. However, it does not give manufacturers the longer-term certainty that they desperately need to invest in their businesses.

“For the good of the UK manufacturing sector, politicians must use this time well and come back with a renewed effort to get a deal over the line.”