By Daniel Hunter
Growth in the UK’s manufacturing sector is continuing to pick up, with orders at their highest level since the start of the financial crisis. That’s according to the latest CBI monthly Industrial Trends Survey.
The survey of nearly 400 manufacturers found that total orders rose for the fifth consecutive month, while exports orders also grew strongly. Meanwhile, output growth for the three months to September rose to its highest rate since August 2011. Output is expected to rise strongly again over the next three months.
With demand building across the UK and globally, stocks have fallen to their lowest level since last November. But inflationary pressures remain muted, with average prices expected to remain relatively steady over the next three months.
“This month’s results show the manufacturing recovery continuing to gather pace," Stephen Gifford, CBI Director of Economics, said.
“Order books are the fullest they’ve been since the start of the financial crisis, and firms are ramping up production to meet demand.
“Firms are more upbeat about growth prospects in the coming quarter than at any time since 1995.”
· 28% of firms reported that total order books were above normal in September and 19% said they were below, giving a balance of 9%, the highest figure since August 2007 (+9%)
· 23% reported that export order books were above normal in September and 18% that they were below. The resulting of balance of +6% is the strongest since February 2011 (+11%)
· The volume of output in the three months to September rose at its fastest rate since August 2011 (+19%). 39% of firms said it rose, 21% said it fell, giving a balance of +18%, which was stronger than expected (+10%)
· Firms expect to increase output at an even faster pace in the next three months: 44% expect to raise output, 11% expect to reduce output, giving a balance of +33%, the strongest expectation since March 1995 (+34%)
· Stock levels of finished goods dropped to their lowest level in September (+5%) since November 2012 (+5%), while average prices in the next three months are expected to remain stable (+3%).
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