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UK manufacturing remains steady, output expectations lowest in 10 years

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UK manufacturing remains steady, output expectations lowest in 10 years

Manufacturing output in the three months to September was steady, but expectations for output growth reached their lowest level since the financial crisis as the the deadline for a possible no-deal Brexit approaches, according to the Confederation of British Industry.

Of the 269 manufacturers surveyed, 13% said their order books were above normal while 41% said they were below normal, yielding a negative balance of 28%, a significant drop from negative 13% in August.

Export order books remained under pressure, as 6% of companies reported that their export order books were above normal and 37% said they were below normal, giving a balance of negative 32%, compared to negative 15% in August.

Of the firms surveyed, 25% said they saw a rise in volume of output in the past three months, while 24% experienced a decline, yielding a balance of 1%. The food, drink and tobacco and mechanical engineering sub-sectors led the rise in output volume, while metal manufacture, metal products and textiles and clothing sub-sectors slowed output.

Businesses' expectations for growth in output in the coming three months were at their lowest level since April 2009, with 19% forecasting growth and 38% a contraction, making up a balance of negative 19%.

Firms' present stocks of finished goods reached their highest balance in 10 years, as 30% of companies said their present stocks were more than adequate and 2% reported that they were less than adequate, yielding a balance of 28%.

"Following a stabilisation in last month's data, UK manufacturers have become noticeably gloomier in September. This likely reflects a combination of heightened Brexit uncertainty and the ongoing global slowdown in manufacturing," Anna Leach, CBI deputy chief economist, said.

The U.K. Supreme Court on Sept. 24 declared Prime Minister Boris Johnson's decision to suspend Parliament for five weeks as unlawful.