Some British industrialists are starting to throw off the unprecedented gloom recorded by CBI surveys last autumn and winter – although demand for their products has slumped faster than at any time for the past 30 years.
Pessimists about the general business situation still outnumbered optimists by 40 per cent of 520 manufacturers replying to the CBI’s latest quarterly Industrial Trends Survey. But that was back to where it was last July and a marked improvement on overwhelming adverse balances of minus 60 and minus 65 in the October and January surveys.
“The first quarter of 2009 was extremely tough for UK manufacturers, but this survey shows firms hope that the worst may be behind them, with the pace of decline slowing slightly,” said Ian McCafferty, the CBI’s chief economic adviser. “However, firms are hopeful the decline in manufacturing activity will moderate slightly in the next three months and sentiment is falling less rapidly for the first time in seven quarters.”
Sixty per cent of the respondents said the volume of their new orders had fallen over the past three months, while only 13 per cent reported an increase.
An adverse balance of minus 48 per cent to the question about employment indicated that more manufacturing jobs are being lost than at any time since October 1991.
More cuts are on the way, though an adverse balance of minus 39 per cent suggests that the process may become less intense.
The CBI calculates that 62,000 manufacturing jobs were lost in the first quarter of this year, with another 51,000 to go by the end of June.
Mr McCafferty said the survey was consistent with the Treasury’s Budget estimate that manufacturing output will fall by some 12 per cent this year.