UK manufacturers predict stable prices

24 August 2011

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24 August 2011 | Angeline Albert

More than three quarters of manufacturers will lower or keep their output prices the same over the next three months thanks to healthy demand.

According to the CBI’s monthly Industrial Trends Survey for August, only 19 per cent of the 510 manufacturers surveyed expected to raise prices during the coming quarter, compared with 10 per cent who said they will lower prices and 71 per cent will keep them the same.

The producers said pressure on prices had lessened following strong inflation in the first six months of 2011. During the survey period, Brent crude oil cost $110.81 (£67.12) per barrel, lower than the $113.73 (£68.91) per barrel during the corresponding period in July.

Some 31 per cent of manufacturers predicted production would rise over the next quarter, 52 per cent believe it will stay the same, and just 17 per cent thought it would fall.

Richard Woolhouse, CBI head of fiscal policy, said in a statement: “Manufacturing order books are holding up, and expectations for output growth are above their historical average. Inflationary pressures have eased since the start of the year, with fewer firms predicting they will have to raise prices at the factory gate over the coming quarter.”

However, the business organisation warned that concerns around growth in the US and the Eurozone still threaten the sector’s recovery. “The risks to manufacturing activity and business confidence have if anything increased, due to market volatility and the recalibration of growth expectations worldwide,” said Woolhouse.

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