Manufacturers reported a rebound in orders and continue to expect moderate growth in output over the next three months, according to the CBI Monthly Industrial Trends Survey for February.
Of the 436 manufacturers, 15% responded that total order books were above normal and 29% said they were below, giving a balance of -14%. This represents an increase of 6 points from the January survey and is a little above the long-run average (-17%).
Export order books also improved somewhat, registering a balance of -20% in line with the long-run average (-21%), but remained well below December levels (-11%).
Looking ahead, manufacturers expect some moderate growth in output over the next quarter (+5%), driven mainly by motor vehicles & transport equipment and food, drink & tobacco.
Expectations for output price inflation for the next quarter remain high (+20%). Motor vehicle & transport equipment manufacturers reported its strongest inflation expectation in four years, offsetting the cooling of price expectations in the food, drink & tobacco sector.
Anna Leach, CBI Head of Economic Analysis, said:
"The rebound in manufacturing orders and expectations for output growth provide some further signs of improvement in the outlook for the UK economy. However, export order books are likely to remain relatively weak until global conditions, especially in the Eurozone, improve more markedly."