By Daniel Hunter

A fall in export demand slowed the recovery in the UK’s manufacturing sector in June, although output growth and total orders are still above their long-run averages.

The CBI’s latest Industrial Trends Survey shows export orders slipped back following two months of improvement.

Meanwhile, output growth improved again in the three months to June and is expected to strengthen gently over the quarter ahead. Growth still remains below rates reached in late 2013 and early 2014.

Although total order books remained above average, they continued to deteriorate, reaching a 23 month low.

Competitive pressures remained intense in the sector. Over the next three months, manufacturers expect the greatest fall in prices since 2009.

Rain Newton-Smith, CBI Director of Economics, said:“Output and overall orders are still doing better than average but hopes that export demand would start to drive forward have not yet been fulfilled.

“Improving momentum in the Eurozone is being offset by the effect of the strengthening pound on UK manufacturers’ overseas sales and margins. On top of that, the ongoing Greek saga is causing uncertainty.

“In the Budget next month, the Government should look to provide struggling exporters with support to help break into key markets.”