British manufacturers reported a marked deterioration in confidence in a survey published on Thursday, with firms signalling renewed strain on supply chains and accelerating cost pressures linked to the war in the Middle East.
The Confederation of British Industry questionnaire found the quarterly measure of optimism about the business outlook collapsed to -65 in April, down sharply from -19 in January. That plunge accompanies a widening of downside signals across firms' order books and investment intentions.
The CBI's monthly order book balance slid to -38 in April from -27 in March, moving further below its long-run average of -14. At the same time, the survey's gauge of expected prices leapt to +32 from +12 a month earlier - the largest month-to-month increase recorded since the series began in 1975.
Investment plans covering buildings, plant and machinery and training also deteriorated, marking their weakest reading since April 2020. The survey noted firms' plans in these categories were at their lowest levels since that date.
Ben Jones, the CBI's senior lead economist, warned that the results contain clear warning signs. "Warning signs are flashing in this survey," he said. "It’s clear that the war in the Middle East is contributing to rising uncertainty, with supply chains beginning to see some renewed strain and cost pressures intensifying." Those comments appear alongside the sharp movements in the survey balances.
The CBI based the publication on 276 responses from manufacturers, with replies collected between March 25 and April 13. The sample produced the sharp shifts in sentiment and price expectations reflected in the headline figures.
For analysts tracking production networks and logistics, the survey highlights mounting uncertainty among manufacturers, weaker near-term order books and a pronounced rise in firms' expected input or output prices. The simultaneous deterioration in investment intentions for physical plant and training points to a pullback in capital and capability commitments in the sector as surveyed firms reassess prospects amid heightened geopolitical risk.
Data snapshot:
- Quarterly optimism balance: -65 in April (from -19 in January)
- Monthly order book balance: -38 in April (from -27 in March); long-run average -14
- Expected prices gauge: +32 in April (from +12 in March) - largest month-to-month rise since 1975
- Survey sample: 276 manufacturers; responses received March 25 - April 13