The total order book balance from the CBI’s monthly Industrial Trends Survey lifted to a balance of plus five in December, its highest level since August.
Export orders, at a balance of minus 13, remain weaker than total order books due to the sluggish eurozone and slower growth among emerging economies, but the figure was an improvement on the previous month.
CBI director of economics Rain Newton-Smith said: “The otherwise solid outlook for UK manufacturers is tempered by a challenging global backdrop.
“With eurozone growth disappointing and some emerging markets facing a tough time, firms need to look harder for opportunities to ramp up exports to high-growth sectors across the globe.”
The falling oil price helped manufacturers cut costs, with crude falling to $62 dollars a barrel last Friday – its lowest price since 2009.
Capital Economics UK economist Paul Hollingsworth said: “The upbeat tone provides an encouraging signal that manufacturers can grow despite the stronger pound and weak eurozone.”
The CBI’s measure for expected total output among firms in the next three months rose to a three-month high of plus 16. Total orders grew across most sectors.