Export order books rose to their highest level in more than three years as the devaluation of sterling following the Brexit vote benefits companies selling abroad, a survey has found.
Meanwhile the outlook for manufacturers over the next quarter continues to be bullish, with the largest expectation of output growth since February 1995, according to the Confederation of British Industry (CBI) survey of industrial trends.
Strong performances in the pharmaceutical and mechanical engineering sectors led broad-based expansion in export order books.
Almost a quarter of businesses said their export orders were above normal, giving the strongest positive balance since December 2013.
The growth in output rose at its fastest rate since July 2014, with 39 per cent of manufacturers reporting rising output volumes.
Anna Leach, CBI head of economic intelligence, said: “It’s been a strong month for UK manufacturers, with production growing robustly and overseas demand on the up.
“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.”
The devaluation of the pound has also had an effect on prices, with more than a third of manufacturers expecting to raise prices over the next three months, continuing the growth in output prices by manufacturers.
Factory gate prices rose by 3.7 per cent in the year to February, according to the Office for National Statistics, the fastest increase since December 2011.
However, there is little sign manufacturers are expecting price rises to feed through to lower demand, with 45 per cent of the companies surveyed by the CBI expecting output to rise, despite ONS data showing input prices rising by 19.1 per cent during the past year.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “Producers are benefiting both from the improvement in global trade flows and the weaker pound. UK manufacturers, however, are heavily reliant on imported inputs. As a result, net trade likely will not offset fully the slowdown in domestic consumption this year."