Overseas demand for UK-made goods is continuing to recover with export order books the least depressed since August 2008, according to a CBI survey. Of the 499 manufacturers responding to the CBI’s monthly Industrial Trends Survey last month, 22 per cent said export orders were above normal and 40 per cent said they were below normal. The resulting balance of -18 per cent is an improvement on the previous month’s figure of -23 per cent, and the highest since August 2008 (-9 per cent). However, total order books remain depressed, reflecting the continued weakness of domestic demand. Some 14 per cent of manufacturers said they were above normal, while 51 per cent said they were below normal. The resulting balance of -37 per cent is broadly unchanged from the previous two months.

With total orders still fragile, firms anticipate only a modest rise in production in the next three months. Some 25 per cent said they expected output to rise in the next quarter, and 20 per cent anticipate a fall, giving a balance of +5 per cent. That compares with +7 per cent in February. Price expectations are the highest since September 2008. The balance of 17 per cent for March compares to 8 per cent in January and February.

Ian McCafferty, CBI chief economic adviser, said: “Our survey shows that UK exports orders are steadily improving as global demand is starting to recover. ‘Home-grown’ demand remains very weak, however, and as a result we can expect manufacturing output to grow only modestly for some time. Producer price inflation is expected to pick up further in coming months, to the fastest rate since autumn 2008. This reflects rising energy prices and increased import costs following Sterling’s decline, as manufacturers try to preserve their battered profit margins.” 
 

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