The CBI monthly manufacturing order book balance for May dropped to -41, following the -38 reading in April. That marks the lowest such estimate since September 2020 amid surging cost pressures. Of note, the gauge of expected selling prices rose to +38 (previously +32) – marking the highest since February 2023.

While the UK PMI data report earlier showed that manufacturing conditions held up in May, it came with a big caveat. Most firms reported a temporary demand increase due to frontloading activity in order to beat price hikes and potential supply disruptions.

As such, the CBI data above is a better signal of underlying conditions and the actual demand environment.

“Against an uncertain global backdrop, the conflict in the Middle East is feeding through to higher energy costs and renewed supply chain disruption, adding another layer of challenges for manufacturers, who are already grappling with weak demand.”