LONDON (Reuters) - With Brexit looming, British factories stockpiled over the last three months at the fastest pace since records began in the 1950s, and they’re increasingly downbeat about their prospects, a survey showed on Friday.
The Confederation of British Industry’s (CBI) quarterly survey added to signs that Brexit and a slowdown in the global economy has lumbered manufacturers, who account for 10 percent of the British economy, with a headache.
Expectations for export orders in the next three months fell to their lowest level since mid-2009, when Britain was reeling from the global financial crisis.
The CBI’s gauges for stocks of raw materials, work in progress and finished goods all hit record highs — findings mirrored by the closely-watched IHS Markit/CIPS purchasing managers’ index published earlier this month.
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Official data suggest stockpiling, intended to minimise any disruption to supply lines in the event of a no-deal Brexit, temporarily boosted manufacturing output in early 2019, but business surveys show factories are bracing for a lull later.
“In the near-term, there is the serious threat to manufacturers that activity will take an appreciable hit from some unwinding of the record stockpiling of manufactured products,” said Howard Archer, economist at the EY ITEM Club consultancy.
The CBI’s monthly gauge of manufacturing orders fell unexpectedly to -5 in April from +1 in March, marking the weakest reading since October 2018. A Reuters poll of economists had pointed to a rise to +3.
Reporting by Andy Bruce; Editing by Hugh Lawson