The Confederation of British Industry’s (CBI) monthly net balance of new orders slipped to -29 in March, from -28 in February, well below its long-run average of -13, signaling ongoing struggles in the UK’s manufacturing sector. British factories reported a downturn, with rising taxes and wages in April dampening sentiment. However, some firms are benefiting from an expected increase in defense spending across Europe. Manufacturers’ output expectations for the next three months fell into negative territory, dropping to -2 after reaching a three-month high of +8 in February. CBI lead economist Ben Jones noted that, while sectors like aerospace and defense show strength, many manufacturers still face weak order books. Concerns over upcoming hikes in social security contributions and the minimum wage have made customers hesitant to commit to capital investments. Export orders improved but remained below the long-term average.
