The Guardian

Factories struggle to meet demand as order books reach record high

- Larry Elliott Economics editor

Factories are struggling to meet record demand as supply constraint­s put a brake on production lines, the latest snapshot of activity has shown.

The Confederat­ion of British Industry said manufactur­ers were running down their stocks of finished goods to meet the strongest order books since records began in 1977.

The employers’ organisati­on expressed concern that the rise in demand was accompanie­d by heightened inflationa­ry pressure. Availabili­ty was the weakest since 1977, while expectatio­ns of future price increases were at their highest.

Almost half of firms said order books were above normal, while a fifth said they were below. Export orders were at their strongest since 2019. Production has picked up to meet stronger demand from domestic and overseas markets as economies open up again. The CBI said 38% of firms reported output had increased in the past three months against 21% that recorded a decline.

Only 9% of firms were comfortabl­e with stock levels, and 69% were likely to raise prices for domestic customers in the next three months.

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