Manufacturing firms experienced an increase in orders in the past three months thanks to strong international demand for British-made goods, according to the CBI.
But a gloomy economic outlook has adversely affected confidence. Its Regional Trends Survey – a survey of almost 500 firms by the CBI – revealed that manufacturers in almost every region of the UK planned to increase their prices over the next three months.
The strongest export gains were in Yorkshire and the Humber, Wales and the East Midlands, while those in Northern Ireland, the North East and the North reported a drop in overseas demand.
CBI principal economist Lai Wah Co said: “Though manufacturers’ confidence is undoubtedly suffering, demand – especially from overseas – is holding up better than expected in most regions. Rapid rises in oil, commodity and food prices are driving ever-increasing input costs for manufacturers. However, most UK regions still feel able to raise their prices to help ease the pressure on profit margins.”
Peter Gutmann, from business firm Experian, which helped with the study, added: “The survey results provide some encouragement at a testing time. Most regions are quite upbeat about orders and exports for the next three months. Perhaps manufacturers are pinning their hopes on the boost to UK competitiveness from sterling’s near 10 per cent depreciation against the euro since November as an offset to slower growth in the eurozone.”