UK manufacturer export order books have risen to their highest level in three years, according to the latest CBI Industry Trends Survey.
Expectations for growth are high among Brit’s producers too – at a more than a two-decade high.
35% of manufacturers expect to raise prices
A broad strengthening of manufacturing saw half of orders accounted for by mechanical engineering and pharmaceuticals.
Output growth rose at its quickest pace since July 2014 in the three months to March, with manufacturers anticipating that it will accelerated further in the near-term. Expectations for selling price inflation remain elevated for the forthcoming quarter. 35% of companies expect to raise prices and 7% anticipate cutting prices.
“Fall in pound is finally lifting demand”
“It’s been a strong month for UK manufacturers, with production growing robustly and overseas demand on the up,” said Anna Leach, CBI Head of Economic Intelligence. “The past fall in the pound seems finally to be helping lift demand for UK manufactured exports, which rose at one of the fastest paces in this survey’s history. And manufacturers are positive about the quarter ahead, expecting output to grow at the fastest rate since February 1995.
“But the flipside is that cost pressures are widespread, and manufacturers expect factory-gate prices to continue to rise strongly over the next three months. And this will also put pressure on prices generally.
“Innovation continues to be a fundamental driver of UK competitiveness and productivity gains and will influence the success of UK companies over the longer term. That’s why we want a commitment from the Government to spend 3% of GDP on R&D by 2025 – a joint target to be met by the private and public sector.”