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UK CBI factory orders see fastest growth since February 2015 in May
19 May 2017, 09:39 | Todd Saunders
The Confederation of British Industry’s industrial trends report said that order books were at their highest since February 2015 Andrew Matthews PA
The Confederation of British Industry's industrial trends report said that output for the three months to May was at its highest since December 2013, underpinned by strong demand in the mechanical engineering and chemicals sectors.
Britain's manufacturers have seen factory orders jump to their highest level in more than two years despite concerns that the United Kingdom economy is slowing, according to a report.
Exports orders also equalled a four-year high last seen in March, reaching plus 10%.
In addition, the balance of manufacturers expecting production to rise over the next three months increased to +28 in May, from +16 in April, albeit remaining below March's recent peak.
The survey of 432 manufacturers reported that total order books were the highest since February 2015, broadly matching the strong levels seen earlier this year.
"We have mounting cost pressures and expectations for factory-gate price rises are running high", Newton-Smith, said.
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"The improvement in the export orders balance, to its joint highest since December 2013, indicates that the drop in the pound is still having substantial positive effects for manufacturing exporters", said Ruth Gregory, UK economist at Capital Economics.
But pricing pressures remain strong, with manufacturers continuing to expect a sharp rise in average selling prices.
They are also concerned that sterling could rise, wiping out the benefit for exporters, should the Brexit talks proceed smoothly and the United Kingdom strike a beneficial trade deal with Brussels.
Manufacturing is heading for a sweet spot ahead of summer, a CBI survey shows. "Sustained investment in innovation and education will be vital to shore up the success of British industry".
"What's more, the risk that the United Kingdom leaves the European Union without a deep trade deal in place is casting a cloud over the outlook for manufacturing", he added, pointing to the six year low in investment plans and suggesting capacity constraints might bite soon, preventing manufacturers from making the most of sterling's depreciation.
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