Production from UK manufacturers grew at the fastest pace in more than 20 years in the three months to July, according to a long-running survey.
Some 43 per cent of almost 400 manufacturing firms surveyed by the Confederation of British Industry (CBI) reported output had increased over the last three months, while only 12 per cent said it was down, giving the strongest positive balance since January 1995.
Meanwhile the balance of manufacturers reporting order books at a higher level than normal rose to 10 per cent, its strongest quarterly reading since 1988.
The findings suggest a more positive picture than recent official data, the latest figures available from the Office for National Statistics (ONS), which showed that industrial production actually fell in four out of the five months to May.
A strong performance from manufacturers would likely provide a timely boost at a time of growing concern among economists for the UK economy. Manufacturing accounts for around 10 per cent of UK economic output, compared to the share of around 78 per cent from the services sector. The ONS reports its first estimate of second-quarter UK growth tomorrow.
Manufacturers remain confident in their short-term outlook, with expectations for the total of new orders still well above the long-term average.
The latest survey also shows continued strength for British exporters, who have been boosted by a weak pound which makes their products more attractive to foreign buyers. Expected growth in export orders in the next three months reached the highest in four decades, although the balance of firms reporting increased volumes dipped slightly from last month’s recent peak.
Meanwhile even expectations for domestic orders grew to their strongest since April 2015, despite fears the slowdown in consumption could continue to drag on the British economy.
Rain Newton-Smith, CBI chief economist, said: “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.”