Manufacturing outlook brightens as order books fill again
The prospects for Britain's manufacturing sector brightened in the second quarter as order books bounced back from a dip, according to data published today.
A third of manufacturers enjoyed increased orders, with the overall balance of firms experiencing more orders than usual swinging from a negative reading to a positive 13 per cent, the figures from the Confederation of British Industry (CBI) show.
“The recovery in orders and a return to bumper growth in production suggests the lull in manufacturing activity may be over," said Anna Leach, CBI head of economic intelligence. However, she added that "risks to demand persist from Brexit and escalating global trade tensions".
Read more: UK manufacturing output in sharpest fall since 2012
The number of firms enjoying an increase in the volume of output in the past three months surged, with a balance of 29 per cent reporting an increase, the highest since December.
The manufacturing industry has enjoyed what the Bank of England has described as a "sweet spot" during the past two years as weaker sterling since the EU referendum almost two years ago has boosted exports, while trading arrangements have remained all but unchanged.
Export order books have remained strong, with the balance of firms reporting above-average orders steady at nine per cent, in line with readings from the past five months and far above the long-term average.
Read more: Business activity in Londons manufacturing and service sector gets a boost
However, the boom for manufacturers appeared to fade at the start of the year, reflecting broader weakness across the British economy. Manufacturers' perceptions of likely volume for the next three months anticipate a slowdown, albeit at historically strong levels.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the survey findings were "reassuring" and showed that the sector's recovery "still has legs".
The Office for National Statistics' measure of manufacturing output for April had pointed to a significant drop in the pace of expansion in the sector, but this may have been a one-off, Tombs suggested.
Read more: Manufacturing growth streak continues in spite of investment clouds
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