22 July 2003 15:21 [Source: ICIS news]
LONDON (CNI)--The UK chemicals industry expects prices to fall in the next three months, according to the latest Confederation of British Industries (CBI) survey, which was published Tuesday.
The CBI's monthly industrial trends survey in July showed that only 2% of respondents believed average prices at which domestic orders are booked will rise, compared with 10% in June*. Thirty six percent expected prices to fall, an increase from 32% in June.
The outlook for chemicals output was mixed. Some 16% of the respondents expected production to rise over the next four months, compared with 18% in June. However, only 15% expected production to decrease, down from 21% in June.
On their present order books, chemical manufacturers were less optimistic. Fifty percent regarded their orders as below normal, up from 39% in June. Only three considered their order books to be normal, down the 9% in March.
For the entire UK manufacturing sector, orders, prices and output fell in the last three months and companies expected the fall to continue in the coming quarter.
CBI chief economic adviser, Ian McCafferty, commented: "Manufacturers have enjoyed little relief in the three months following the end of conflict in Iraq and the downturn in orders appears relentless despite the recent softening of the pound.”
He added: “Manufacturers' main hope is that a pick-up in the US later this year helps trigger a gradual recovery in the UK. The recent Bank of England (BoE) move was timely but we may need more cuts in interest rates to support the economy at this challenging time."
The survey was carried out between 19 June and 9 July and 877 manufacturers responded.
* The survey for June covered expectations over the next four months, instead of the next three.
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