Orders with factories better than expected

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FACTORY orders were stronger than expected this month, the CBI’s industrial trends survey showed yesterday, offering a rare glimpse of positive economic news.

The Confederation of British Industry survey’s total order book balance rose to -6 this month from -11 in June, its highest level since February and countering expectations of a decline to -12.

“Despite a further escalation in the euro zone crisis, the survey shows some resilience in the UK manufacturing sector with sentiment about the general economic situation broadly stable,” said CBI head of economic analysis Anna Leach

Howard Archer, Chief UK and European Economist at IHS Global Insight, said: “The survey indicates that the manufacturing sector picked up at the start of the third quarter after suffering a very difficult second quarter.

“However, much of this improvement is likely to have been due to the making up of some activity lost to the two days public holiday in June, and it remains to be seen if things really are starting to look up for the manufacturing sector. Conditions currently still look to be very challenging.

“Following the Office for National Statistics estimating that manufacturing output plunged 1.4 per cent quarter-on-quarter in the second quarter, the CBI industrial trends survey for July at least offers hope that the sector will be able to grow in the third quarter.”