UK manufacturers report order improvement

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UK manufacturers have reported an encouraging improvement in total and export order books in February, following a much weaker period over late 2011, the CBI said.

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% reported total order books to be above normal, while 23% said they were below. The resulting rounded balance of -3% is well above the long-run average (-18%) and a significant improvement in the levels of recent months.

Export orders also saw a similar upturn, with 22% of respondents stating levels were above normal and 24% saying they were below, giving a balance of -2%, compared to the long-run average of -21%.

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% 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.”