UK manufacturing set to grow

Posted on 24 Feb 2012

Strengthening demand and output growth can be expected, says business organisation CBI.

There has been a strong improvement in total and export order books reported by UK manufacturers in February, following a weak fourth quarter in 2011.

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 that responded 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 above the long-run average (-18%) and a significant improvement on the levels of recent months.

Export orders also saw a similar upturn, with 22% of respondents stating that 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 has strengthened, underpinning solid expectations for output growth, which is encouraging news, given the particularly difficult period for business in the final quarter of 2011.”