LONDON (MktNews) - Demand in the UK manufacturing sector worsened further in March and output expectations for the coming four months, although still positive, weakened for the second consecutive month, according to the latest industrial trends survey published by the Confederation of British Industry Thursday.
The survey showed the total orders balance dropping to -23% in March from -16% in February. The CBI said this was the worst reading since July 1999.
Export order books were still well below normal but stabilised, with the balance unchanged at -24%.
The decline in overall demand was reflected in output expectations. Over the next four months output is expected to be little changed. The balance fell to +3% from +9% in February.
"This survey is further evidence that the troubles of the UK's manufacturing sector are far from over," concluded Kate Barker, the CBI's chief economist.
She added, "The US slowdown may have a more serious impact on the UK than first predicted. Higher stock levels and falling demand are already causing companies to rein back their output plans."
Stocks of finished goods were broadly stable in March. The balance of +20% of firms reporting more than adequate stocks compares with +19% in February, but they stayed at their highest level since March 1999 and above the long-term average.
Price pressures remained weak, with domestic prices expected to fall further over the next four months. The price expectations balance stood at -14% in March, the same as in February.