Skip navigation

Gloucestershire Business News

Manufacturing output falls as skills worries highest since 1973

UK manufacturers have reported a further fall in output in the three months to October, but expect production to pick up in the coming quarter.

The CBI's latest quarterly Industrial Trends Survey found that costs growth remained exceptionally strong.

The share of firms citing worries about access to skilled labour reached a 49-year high, with business sentiment falling for a fourth consecutive quarter, and at the fastest rate since the early days of the covid pandemic.

The survey, based on the responses of 279 manufacturing firms, found:

  • Output in the three months to October fell slightly, and at a similar pace as in the quarter to September (balance of -4 per cent from -4 per cent). However, firms expect output to increase slightly in the next three months (+7 per cent). Output fell in 11 of 17 sub-sectors, with the overall decline driven largely by paper, printing & recorded media and metal manufacturing.
  • The share of firms citing a shortage of skilled labour as a factor likely to constrain output over the next three months reached its highest level since October 1973 (49 per cent, from 39 per cent in the quarter to July). The proportion of firms citing materials/components availability as a constraint on output fell for the second successive quarter (54 per cent, from 63 per cent in the quarter to July and 71 per cent in April, which was the highest reading since 1975).
  • New orders fell in the quarter to October (balance of -8 per cent compared to +11 per cent in the quarter to July), reflecting a decline in domestic orders (-8 per cent from +7 per cent) and the quickest fall in export orders since the quarter to July 2020 (-18 per cent from -2 per cent). Manufacturers expect a similar contraction (-10 per cent) in new orders over the next three months.
  • Business sentiment fell for a fourth successive quarter, and at its fastest rate since April 2020 (balance of -48 per cent from -21 per cent in July).

Alpesh Paleja, CBI lead economist, said: "It's a tough time for manufacturers. Price pressures remain acute, availability of materials is still a big issue - and it is 49 years since manufacturing firms were this worried about being able to find workers with the skills they need. It's really no surprise that sentiment has deteriorated further.

"Action to address the skills challenge is critical for the sector's future prospects. Urgent reform to add flexibility to the Apprenticeship Levy would be an important first step for the new Prime Minister, which can rebuild confidence for manufacturers and restore momentum to their investment and growth ambitions."

Related Articles

Walkout Wednesday: Businesses and families hit by strikes Image

Walkout Wednesday: Businesses and families hit by strikes

Up to half a million workers are walking out today in the biggest day of strikes for years.

BBC staff to hold ballot over local radio cutbacks Image

BBC staff to hold ballot over local radio cutbacks

BBC journalists are to vote on industrial action in a dispute over planned changes to local radio programming.

Business confidence in South West in positive territory Image

Business confidence in South West in positive territory

A monthly Business Barometer in the South West has provided 'grounds for optimism'.

Fly-tipping figures ‘fail to reflect full scale of crime’  Image

Fly-tipping figures ‘fail to reflect full scale of crime’

The number of fly-tipping incidents across nine regions in the South West has soared in the past year, according to the latest figures.

Copyright 2023 Moose Partnership Ltd. All rights reserved. Reproduction of any content is strictly forbidden without prior permission.