UK manufacturers are in demand

Manufacturers are upbeat about demand over the next three months, even though orders stayed unchanged in the quarter to July, disappointing expectations of faster growth, according to the latest Quarterly Industrial Trends survey by the

.

Firms expect modest growth in domestic orders over the coming three months, are the most positive about the next quarter's export orders in over two years and are increasingly optimistic about export prospects for the coming year.

Hopes for a rise in overall demand this quarter were not met due to the continued weakness in the volume of domestic orders.

Domestic demand fell for a balance of minus five per cent of firms - disappointing expectations of a pick-up. As a result, total order book levels were broadly unchanged in the three months to July, with a balance of one per cent.

Export orders, by contrast, rose for the first time in a year, with a balance of seven per cent reporting an increase over the past three months. This was driven largely by demand for intermediate goods such as components, parts and building materials. A balance of 13 per cent of firms expect export orders to increase over the next three months; if this expectation is realised, this would see the fastest growth in export orders since 1995.