The Confederation of British Industry said its quarterly measure
of confidence among factory firms plunged to -34% from -9% in
the three months to January, its lowest since April 2020.
Manufacturing orders and output continued to grow, albeit at
slower rates and the war in Ukraine was exacerbating COVID-related
supply problems, the CBI said.
That was pushing up costs and concerns over the availability of
raw materials by the most since the mid-1970s.
The survey's gauge domestic prices for the next three months
rose to a 45-year high.
"April's CBI survey adds to evidence that the manufacturing
sector is slowing as customers temper their demand in the face
of huge increases in prices," said Samuel Tombs, an economist
with consultancy Pantheon Macroeconomics.
"We think manufacturers are right to be relatively downbeat
about the outlook and expect production to flat-line over the
rest of this year."
Monday's survey echoed other measures of confidence which have
fallen sharply among businesses and consumers as inflation
accelerates.
Over the three months to April, the CBI's gauge of output growth
slowed to +19% from +27% - still above a long-run average of +4%
- and new orders also rose more slowly +22% compared with +38%
in the three months to January.
Firms expected growth to slow further over the next three
months.
Average costs grew at the fastest rate since July 1975, with a
net balance of 87% of firms reporting increases, up from +74% in
January. Domestic prices grew at the fastest pace since October
1979, with a net balance of +60% compared with +40% in January.
However, a monthly version of the CBI survey showed price
pressures were expected to ease in the three months ahead while
total orders growth slowed to +14% in April from +26% in March.
(Reporting by William Schomberg and Andy Bruce)
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