The monthly order book balance rose to -30 in January, which marks a slight improvement from the -32 estimate in December. That's the best reading since September but it still points to extended weakness in the industrial sector. For some context, the index remains well below its long-run average of -14.
The only bright side is that business optimism is seen improving to -19 from -31 previously. But on the prices side, there is more discouraging news for the BOE. The survey's gauge of expected prices jumped to 29 (previously 19), which is the highest since February 2023. And that was when the UK got a price shock amid the Russia-Ukraine conflict, so this is something to be mindful of as price pressures remain a concern.
CBI notes that existing conditions for manufacturers are "extremely tough". Adding that:
"At the same time, cost pressures - from rising wages, high energy prices and taxes - are squeezing margins and weighing on competitiveness, pushing firms to plan price rises even as demand remains subdued."
