Manufacturing activity remains firm, but supply pressures mount, says CBI

22 Oct 2021

UK manufacturing output volumes in the quarter to October grew at a similarly firm pace to September, according to the Confederation of British Industry (CBI).

The latest quarterly CBI Industrial Trends Survey shows manufacturers reported output increasing in 11 out of 17 sub-sectors. Growth was driven by the chemicals, aerospace, food and drink and tobacco sub-sectors, and firms expect output growth to pick up substantially in the next quarter.

However, concerns about supply shortages in the next three months escalated further in October. Almost two-thirds of firms cited availability of materials and components as a factor likely to limit output next quarter.

Manufacturers also expressed heightened concerns about labour shortages affecting future output, with two in five firms worried about a lack of skilled labour and nearly a third concerned about availability of other labour.

Anna Leach, Deputy Chief Economist at the CBI, said: 'From higher material costs to labour shortages, manufacturers continue to face a number of serious global supply challenges, hampering their ability to meet strong demand.

'Manufacturers are using key levers such as hiring new workers and planning further investment in plant and machinery and training to expand production. But with both orders and costs growth expected to climb over the next quarter, we're not out of the woods yet.'

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