Manufacturers reported a rebound in orders and continue to expect moderate growth in output over the next three months, according to the CBI Monthly Industrial Trends Survey for February.
The CBI says that of 436 manufacturers surveyed, 15 per cent responded that total order books were above normal and 29 per cent said they were below, giving a balance of -14 per cent, representing an increase of six points from the January survey.
Export order books also improved, registering a balance of -20 per cent in line with the long-run average (-21 per cent), but remained well below December levels (-11 per cent).
Looking ahead, manufacturers indicated that they expect some moderate growth in output over the next quarter (+5 per cent), driven mainly by motor vehicles & transport equipment and food, drink & tobacco.
Expectations for output price inflation for the next quarter remain high (+20 per cent). Motor vehicle & transport equipment manufacturers reported its strongest inflation expectation in four years, offsetting the cooling of price expectations in the food, drink & tobacco sector.
Commenting of the survey, Carl Williamson, manufacturing sector lead, Mid-Markets, Lloyds Bank Commercial Banking, said, ‘These figures are further evidence of a positive start to the year for the UK’s manufacturing sector.
‘The sector can approach the next quarter with a sense of cautious optimism, underpinned by the modest rise in export orders, while still below December levels, and stable domestic demand.
‘Manufacturers have worked hard to penetrate new export markets and capitalise on global economic growth by developing their international networks. The impact of this strategy is now bearing fruit and should provide a solid platform for future growth.
‘Despite the challenging trading conditions, manufacturers remain cautiously optimistic for their future output prospects. However, continued investment is essential to maintain competitiveness at home and abroad.’