By Jonathan Davies

The UK's manufacturing sector continued to grow in the second quarter, but exports are set to weaken as currency pressures continue to take effect, according to business lobby group, the CBI.

A net 9% of businesses surveyed said new orders had risen during the three month period, well above the long-running average of -0.1%.

New orders in the UK were up 12% and those for export were up 6%.

Survey respondents continue to report sharp falls in competitiveness in the EU, likely linked to Sterling rises earlier in the year. Political and economic conditions abroad were also seen as a constraint on orders by a significant number of firms.

Investment intentions remain broadly similar to the last quarter, staying above their long term averages, with plans for spending on building and plant and machinery improving slightly.

Katja Hall, CBI Deputy Director-General, said: “Manufacturers are continuing to feel the pressure from the stronger pound.

“Greater buoyancy in exports remains a missing element from the UK’s recovery. Nevertheless we’re encouraged by the Government’s commitment to take steps to address this as part of its recently announced productivity plan.

“The EU remains our largest trading partner, so while the UK economy’s direct exposure to Greece is minimal, we must encourage all leaders to act decisively to preserve growth and stability throughout the Eurozone.

“Despite Sterling pressures and the challenging global backdrop, investment intentions remain above average, particularly in innovation and training.”