According to a survey conducted by the Confederation of British Industry (CBI), the decline in British manufacturing orders eased in July, reaching the weakest rate seen this year.

The CBI's monthly balance of new orders improved to -9 from -15 in June, marking the highest reading since December and surpassing the long-run average of -13.

Furthermore, the survey revealed a positive turn in the gauge of output for the past three months, signaling the first positive shift this year. Manufacturers expressed increased optimism, with the quarterly reading reaching its highest level in two years.

While these findings provide a glimpse of optimism among manufacturers, the overall industry outlook remains subdued, according to CBI lead economist Ben Jones. Cost pressures are still acute, despite the monthly gauge of expected output prices easing to the lowest level since February 2021.

Jones expressed concern over the impact of squeezed margins and higher finance costs on investment plans. In fact, quarterly investment intentions for plant and machinery have declined to their lowest level since January 2021, suggesting potential challenges ahead for the sector. Photo by Robin Juste Emery, Wikimedia commons.