UK manufacturing output fell at a faster rate in February but production is suffering less than in earlier lockdowns, a CBI survey indicated.
Output volumes in the three months to February dropped 8% compared with a 2% dip a month earlier, the business lobby said.
Output increased in 11 of 17 subsectors but this was outweighed by sharper declines in motor vehicles and transport equipment and food, drink and tobacco.
Manufacturers were more optimistic about the outlook, expecting output to be roughly flat compared with an expected 24% drop in January. Order books improved to -24% from -38% in January, broadly in line with December but below the long-run average of -14%.
Alpesh Paleja, the CBI’s lead economist, said: “Manufacturing activity remains patchy, but so far appears to have taken a smaller hit than in previous lockdowns. A stubbornly mixed picture persists among the different manufacturing sub-sectors, pointing to the asymmetric impact of restrictions.”
With the prime minister due to set out a “roadmap” for easing Covid-19 restrictions on Monday Paleja said manufacturers needed the government to extend support for the sector. Chancellor Rishi Sunak is preparing to extend his job support scheme and business rates holiday at his 3 March budget, the Financial Times reported on Friday.
Paleja said: “It is vital that manufacturers are supported beyond April, in line with the restrictions that will remain. Immediate steps to extend the Job Retention Scheme and deferring VAT repayments until the end of June are essential, alongside business rates relief to protect jobs.”
The CBI survey ran from 27 January to 12 February and 296 manufacturing firms responded.
