19 June 2003 17:23 [Source: ICIS news]LONDON (CNI)--The UK chemicals industry expects prices to fall over the next four months, according to the latest CBI (Confederation of British Industries) survey published Thursday.
The CBI's monthly industrial trends survey in June showed that only 10% of respondents believed average prices at which domestic orders are booked will rise, compared with 41% in May. Thirty two percent expected prices to fall, compared with 21% in May. Fifty eight percent said prices will remain the same, up from 38% last month.
The outlook is mixed for output. Some 21% saw production falling over the next four months, compared with 17% in May. However, 18% expected production to increase, compared with 15% in May.
Chemical manufacturers were less optimistic on their present order books. Thirty nine percent saw their orders as below normal, compared with 25% in May. Fifty three percent considered their order books to be normal, compared with 65% in March. There was little difference, however, in views on export order books but the number of respondents who thought their present stocks of finished goods are more than adequate slumped to 16% from 51% in May. Eighty-one per cent believed their stocks of finished goods were adequate against 43% last month.
For the entire UK manufacturing sector, there was no trace of recovery with domestic and international demand being weak. Order books showed no significant improvement on last month and continue to be significantly below normal with a balance well below the post-1992 average of minus 18.9, extending the trend of the past two years, said CBI.
Doug Godden, CBI head of economic analysis, said: "Manufacturers' long wait for recovery seems set to continue and firms will take little comfort from the current business climate. Demand at home and abroad remains persistently weak and output continues to stagnate. Companies are cautious about the future and with no danger from inflation, an interest rate cut remains appropriate."
The survey was carried out between 22 May and 5 June and 962 manufacturers responded.
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