FX.co ★ UK Factory Orders Falls Further: CBI

The Confederation of British Industry (CBI) reported a continued decline in its monthly net balance of new orders, reversing to -29 in March from -28 in February, and remaining significantly below the long-term average of -13. This indicates persistent challenges within the UK's manufacturing sector. The downturn has been attributed to the impact of rising taxes and wages anticipated in April, affecting overall business sentiment. Nevertheless, certain firms are poised to benefit from expected increases in defense spending across Europe. Despite this, manufacturers’ projections for output over the next three months have turned negative, dropping to -2 from a recent peak of +8 in February. CBI's lead economist, Ben Jones, remarked that although sectors such as aerospace and defense display robustness, many manufacturers continue to grapple with sparse order books. The looming rise in social security contributions and the minimum wage is causing customers to hesitate on capital investment commitments. Export orders have shown some improvement; however, they continue to trail behind the long-term average.