UK manufacturers have reported an encouraging improvement in total and export order books in February, following a weaker period over late 2011, the CBI says.
As a result, firms expect solid output growth over the coming three months, according to the CBI’s most recent monthly Industrial Trends Survey.
Of the 471 manufacturers responding to the survey, 21 per cent reported total order books to be above normal, while 23 per cent said they were below. The resulting rounded balance of -3 per cent is well above the long-run average (-18 per cent) and a significant improvement in the levels of recent months.
Export orders also saw a similar upturn, with 22 per cent of respondents stating that levels were above normal and 24 per cent saying they were below, giving a balance of -2 per cent, compared to the long-run average of -21 per cent.
As a result of the improvement in orders, for the second month running UK manufacturers expect production to rise over the next three months, with a balance of +15 per cent expecting an increase in their volume of output.
Ian McCafferty, CBI chief economic adviser, said: “The improvement in manufacturing conditions seen in January has been sustained this month. Both domestic and overseas demand have strengthened, underpinning solid expectations for output growth, which is encouraging news, given the particularly difficult period for business in the final quarter of 2011.”
Expectations for output price inflation (+10 per cent) were similar to those in the January survey (+13 per cent). While they remained above the long-run average (+1 per cent), expectations are still well below those over the same period a year ago.
Stock adequacy (+15 per cent) was broadly in line with its long-run average, having seen little change since November 2011.
