28 April 2003 16:33 [Source: ICIS news]LONDON (CNI)--The UK chemicals industry sees a fall in output in the near future but expects prices to rise, according to the latest CBI (Confederation of British Industries) survey published Monday.
The CBI's monthly industrial trends survey for April showed that only 21% of the respondents believe output will rise over the next four months, compared with 37% in March. Sixty seven percent saw output as stable, compared with 58% the last time. Twelve percent expect output to fall, which is seven percentage points more than in March.
As for average prices at which domestic orders are booked, 14% of the respondents saw them rising over the next four months, compared with 9% in March. Only 8% expect prices to fall, compared with 33% in March.
Chemical manufacturers were also more optimistic on their total order books. Sixteen percent saw their books as below normal, compared with 33% in March. Sixty eight percent considered their order books to be normal, compared with 45% in March. Only 32% of respondents said their export order books were below normal compared with 40% in the previous survey. Fifteen percent said their overseas order books were above normal against 13% in March.
However, for the entire UK manufacturing sector, the CBI's survey indicated orders falling at the fastest rate for four years.
Digby Jones, CBI director-general, said: "The end of the Iraq conflict will steady nerves. But the world's economic problems were there before the war and they are still there now. Manufacturers hoped that domestic demand would hold up until there was a pick up in global trade but that does not seem to be happening.
"This has been compounded by a slowdown in other parts of the economy, most worryingly in consumer spending. It would be wrong to overstate the situation - we are not predicting a recession at all. But the time has come for another cut in interest rates to see us through this difficult patch. The prospects for a sustained recovery appear a long way off and signs of inflation in the wider UK business sector are rare."
The survey was carried out between 20 March and 9 April and 937 manufacturers responded.
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