UK factories see big drop in output ahead, supply problems too

A man works inside the Walkers crisps factory, amid the coronavirus disease (COVID-19) outbreak, in Leicester, Britain

British manufacturers expect a sharp fall in output in the three months ahead and there were widespread concerns about COVID and Brexit-related problems hindering the supply of components and materials, a survey showed on Thursday.

The Confederation of British Industry’s quarterly measure of expected new orders fell to -17 compared with a reading of zero in the previous survey in October.

New orders in the three months to January also fell to -12 from +3.

Stockpiling picked up ahead of Britain’s departure from the European Union’s single market on Dec. 31

Almost half of the manufacturers surveyed – the highest share since January 1975 – were worried that access to materials or components may limit their output over the quarter ahead.

“This appears to be linked to widespread COVID-related supply disruption, such as delays in shipments from abroad, a shortage of containers across the world, and knock-on impacts from disruptions to production over 2020,” the CBI said.

“Border challenges and customs-related delays arising from Brexit also appear to be playing a role.”

A monthly version of the survey showed manufacturers in January expected their output volumes to fall by the most since June of last year when Britain was emerging from its first coronavirus lockdown.

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