Production among UK manufacturers has grown at the fastest pace since 1995 in the last three months. According to the quarterly CBI Industrial Trend Survey, 43% of the respondent firms said the volume of output over the past three months was up.
For the survey, 397 manufacturers responded to questions about their production, employment and expectations. Most of the results were positive: The employee headcount increased at the fastest rate for three years. Hiring intentions also improved. 32% of manufacturers stated that their employee number was up. Only 13% reported a downward trend.
According to the quaterly survey, 35% of businesses reported an increase in total orders, and 21% a decrease, giving a balance of +14%. These numbers are in line with expectations, but still robust. Especially domestic orders were reported to expand at 19% growth. Export orders remain to grow, even though the growth is slowing down (+17%).
18% of firms said they were more optimistic about the general business situation than three months ago and 13% were less optimistic, giving a balance of +5%. Optimism about export prospects for the year ahead grew (+13%) at a solid pace, the CBI survey reports.
“Output growth among UK manufacturers is the highest we’ve seen since the mid ‘90s, prompting the strongest hiring spree we’ve seen in the last three years. Cost pressures are easing and firms are upbeat about the outlook for export orders,” said Rain Newton-Smith, CBI Chief Economist.
“It’s great to see the benefits from the decline in sterling for UK exporters feeding through. But the flipside is the broader hit to consumer spending power across the economy from stronger inflation, which is likely to have fuelled the slowdown in the economy in Q1 and is expected to pull down growth in Q2.”
The expectations for the following period are very optimistic as well. With a plus of 16%, expectations for domestic order growths are the most upbeat since April 2015, the survey reports. Expectations in export orders are also remarkably high (+37%). Expectations for output growth are high as well at +28%.
Additionally, the respondents also expect an increase in investment in training and retraining. At +28% this is the strongest pace since January 2015.