UK Manufacturing Order Books Weakest Since 2020

The UK’s total order book balance fell to -32 in October 2026, down from -9 in September and well below market expectations of -20, according to a survey by the Confederation of British Industry (CBI). The reading points to a sharp deterioration in new orders, highlighting continued challenges facing the UK manufacturing sector. CBI Senior Economist Cameron Martin said that persistently high costs were squeezing profitability, while weakening competitiveness and fragile business confidence continued to weigh on investment decisions. However, the survey’s quarterly measure of output expectations improved to -1 from -30 in July, suggesting a potential stabilization in manufacturing activity in the months ahead. Meanwhile, the quarterly gauge of domestic price expectations rose to +24 from +11, indicating that manufacturers anticipate stronger price pressures.

The UK’s total order book balance improved to -9 in September 2026 from -25 in August, marking the strongest reading since July 2023 and beating market expectations of -34. Export orders also improved, while remaining below “normal” at -9, but well above the historical average of -19. Output fell only marginally, with the balance improving sharply to -4 from -17. Manufacturers expect output to decline slightly again through December, at -6. Selling-price expectations also eased considerably to +12 from +22 in August, moving closer to the long-run average of +8 and suggesting some cooling in cost pressures. However, finished-goods inventories were only just adequate, with the balance falling to +2. The CBI said the data point to tentative stabilisation in manufacturing, but warned that high energy, employment and supply-chain costs continue to constrain firms. It said the upcoming Budget could help support investment and growth by reducing business costs and improving confidence.

The Confederation of British Industry’s monthly industrial order-book balance improved sharply to -25 in August 2026 from -45 in July, marking the strongest monthly increase in more than five years and above expectations of -40. Although the reading still indicates declining orders, the improvement suggests greater resilience in the UK manufacturing sector despite the ongoing economic impact of the Iran conflict. Expectations for factory output also strengthened, while export orders moved into positive territory for the first time since June 2022. However, manufacturers continue to face significant cost pressures. The survey showed that expectations for selling prices increased to +22 from +11 in July, likely reflecting the recent rebound in crude oil prices and renewed concerns over input costs.