The CBI’s latest survey of the manufacturing sector indicates that manufacturers are enjoying the longest run of sustained demand for 12 years.

However firms expect to continue the recent trend of marked price rises over the coming months.

In the monthly Industrial Trends Survey, published yesterday, a balance of three per cent of firms said their total orders books were 'above normal'.

This was the tenth time in 12 months that firms said order books were so healthy, the strongest showing since 1995.

According to the survey, which draws on 20 years of comparative data, this has largely been driven by demand for capital goods. Orders books in this sector are at levels not seen since August 2007.

Despite this, export demand eased this month with a balance of eight per cent of firms saying orders were 'below normal'.

As a result of this, firms expect their output to grow over the coming three months, although at rates slightly lower than seen in the first half of 2007.

A balance of 22 per cent of firms told the CBI that they expect their domestic prices to go up over the next three months, particularly among food and metal products manufacturers.

‘It is encouraging to see that the slowdown already in train in some sectors of the economy has not yet hit manufacturers,’ said Ian McCafferty, CBI chief economic adviser.

‘While manufacturing is not going to be immune to weaker demand at home and abroad, the recent depreciation in sterling will be a helpful boost for exporters over coming months,’ he added. ‘A resilient, export-orientated manufacturing sector is exactly what we need as we enter a tricky period of rebalancing the economy away from its dependence on domestic demand.’