Gloomy month for manufacturers

Manufacturing is under pressure

UK manufacturers are struggling to bring in business, with orders falling at a sharper rate in March than in previous months.

The CBI's latest monthly industrial trends report showed a fall in the total order balance to - 13 in March from - 10 in the previous month.

Businessmen blamed high oil prices and slower consumer spending.

This latest report indicates that the revival in confidence seen in February was just temporary.

Oil bites

Consumer spending dipped sharply in the final quarter of last year, putting pressure on industry.

Separate figures from the Office for National Statistics show that household spending rose by just 0.2% in the fourth quarter, compared with a 0.7% growth rate in the previous quarter.

Demand has been subdued so far in 2005 and firms do not expect this to improve anytime soon Ian McCafferty, CBI

Coupled with that, cost pressures on industry have built up as crude oil prices have continued to rise.

Looking ahead, 30% of companies surveyed by the CBI expect output to rise in the next three months against 21% who expect it to fall.

"Manufacturers are struggling to lift orders amid challenging economic conditions," said the CBI's chief economic adviser Ian McCafferty.

"Demand has been subdued so far in 2005 and firms do not expect this to improve anytime soon."

Export orders were also lower than in the previous month, with 31% of firms reporting orders below normal and just 13% saying they were above normal.