Trade expected to improve but general sentiment is negative
In October 2012 the industry expressed a positive view about the general business situation and believed that increased output levels would be achieved as we entered 2013. However, this optimism was not borne out by actual performance, with new orders (-6%) and output volumes (-10%) both down on balance. This has influenced perhaps the prevailing general mood, with an expression of negative sentiment (-19%) in February about the general business situation compared to 4 months ago. This is despite expectations that in the next 4 months new order intake (+29%) and the volume of output (+17%) will rise.
The furniture manufacturing industry’s overall performance in 2012 does not offer any form of solace. According to the Office of National Statistics (ONS), the production level fell by 10.9% on that achieved in 2011. The ONS series is an index and the base year (indexed at 100) is 2009 and therefore with an index figure of 94.8 in 2012 the industry is down on output by over 5% compared to a year when we were in the depth if a major recession.
Looking ahead, the BFM survey also shows that those that export furniture are far more optimistic about achieving better performance at home than overseas.
There was more bad news today. A survey that shows activity in the UK's manufacturing sector unexpectedly shrank in February. The survey was published by the Markit/CIPS purchasing managers' index (PMI) and shows manufacturing fell to 47.9 last month, from a downwardly revised 50.5 in January.
It was the first reading below 50 - which indicates contraction - since November last year.
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