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Manufacturing gloom descends to 7-year low

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Date: Wednesday 20 Aug 2008

LONDON (ShareCast) - Britain’s manufacturers are more downbeat on output prospects than at any time in the past seven years, says the Confederation of British Industry (CBI).

The CBI’s monthly Industrial Trends Survey also revealed a second consecutive drop in manufacturer’s order books to match April’s 18-month low.

A net 13% of them judged total order book levels to be ‘below normal’, according to the employers' organisation.

Meanwhile, a third of companies expect their volume of output will fall in the coming quarter and a just a fifth to rise. The balance of -13% is the worst since December 2001.

Prices are set to rise further over the next three months, reckon 31% of the 603 firms surveyed, just a touch less than July’s 18-month high.

"Manufacturers are becoming more downbeat about forthcoming levels of activity but are still having to raise their prices due to the severity of recent cost increases,” said the CBI’s chief economic adviser Ian McCafferty.

“Domestic conditions remain sluggish and the recent slowdown in the eurozone economies is starting to make conditions tougher for UK manufacturing exporters, although the weaker pound will offer some relief."

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