LONDON (Reuters) – British industrial orders growth slowed sharply in October to its weakest in six months, against a backdrop of sharply rising raw materials prices and widespread labour shortages, figures from the Confederation of British Industry showed on Thursday.
The CBI’s monthly manufacturers’ order book balance fell to +9 in October from +22 in September, its lowest since April and well below the average forecast of +18 in a Reuters poll of economists.
Quarterly CBI survey data showed domestic prices in October rose at the fastest pace since April 1980, while stocks of raw materials were the lowest on record.
The survey’s gauge of expected average unit costs – which add in wage bills – rose to its highest since April 1977.
“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,” CBI deputy chief economist Anna Leach said.
Optimism about the overall business situation fell to +2 in October from +27 in July, its lowest since January when Britain’s economy had re-entered a COVID-19 lockdown.
However, short-term expectations for output growth remained buoyant, with October’s monthly balance of +33 the highest since July and well above the series’ long-term average of +8. Output over the past quarter was also reported as above average.
(Reporting by David Milliken and Andy Bruce)
