By Jonathan Davies
Exports orders improved as the manufacturing sector strengthened again in May, according to the CBI Industrial Trends Survey.
The figures, which come during Export Week, found that export orders were well above average, matching the six-month high reported in February. Fifteen percent of businesses said their export order books were above normal, and 22% said they were below normal, giving a balance of -7%. Following a sharp deterioration in March (-26%), May’s level was an improvement for the second month running, and the highest level since August 2014 (-3%).
The strength was reasonably broad-based, with export orders above average in 12 of the 18 sectors surveyed, while the gap between total and export order books narrowed sharply.
Just over a third (34%) of firms said the volume of output over the past three months was up and 25% said it was down, giving a balance of +9%. This is a recovery from April’s twenty-two month low (+4%) and was above average (+3%).
Growth in output volumes recovered from April’s twenty-two month low in May, but remained relatively modest. Expectations for the coming three months are at a similar level to the previous month, remaining somewhat above average.
Manufacturers’ expectations for price inflation are still subdued.
Rain Newton-Smith, CBI Director of Economics, said: “Things are looking up for our manufacturers, with growth continuing and export orders improving.
“Some of this could be down to an improvement in the Eurozone’s momentum - but the strengthening pound is still proving quite a challenge.
“To drive trade progress forwards, we want to see the new Government recommit to an ambitious, long-term export target to fully unlock the UK’s potential. Doing this will be vital to boosting investment, jobs and growth right across the country.”