Manufacturing output growth has accelerated to its fastest pace in two years, according to new figures which add to burgeoning optimism about the UK’s economic prospects.
A CBI survey found 37 per cent of firms reported volume growth in the three months to August compared to 21 per cent saying it had fallen, a balance of 16 per cent – the highest since the same month in 2011, when it was 19 per cent.
The renaissance of Britain’s once mighty manufacturing base is seen as vital to helping the country achieve sustainable recovery and long-term economic health but it has been lagging behind other sectors.
The new figures add to growing confidence that its fortunes are finally improving, although prices are expected to remain subdued.
Output growth was seen in 12 out of 16 sub-sectors, with a particularly strong performance in the smaller areas of building materials, metal manufacture and electrical goods, the CBI said.
Optimism among manufacturing firms is indicated by the finding that a balance of 25 per cent believe output will increase at an even faster pace in the next three months – the rosiest outlook since March 2011, when the figure was 27 per cent.
The survey of 413 companies also found 25 per cent reporting total order books were above normal, compared to 26 per cent saying they were below – giving a rounded balance of 0 per cent that was the best since August 2011.
But the balance of expectations for output prices was flat at 0 per cent, the worst level since July last year.
Stephen Gifford, CBI director of economics, said: “Manufacturers have seen a real upturn in fortunes this quarter, as output grew at its fastest pace for two years.
“Domestic and export orders have rebounded almost across the board, and manufacturers expect this strength to continue during the next three months.
“UK manufacturers seem to be experiencing a build-up in momentum, but risks in the global economy still mean that it won’t be plain sailing for some time to come.”
The survey comes days after the CBI lifted its forecast for UK economic growth this year from 1 per cent to 1.2 per cent amid signs of a pick-up in business confi- dence.