STRONG manufacturing figures for the whole first quarter have bolstered hopes that the UK will avoid a second recession.
Output expectations grew in each of the three months, the Confederation of British Industry’s industrial trends survey showed yesterday, and the proportion saying order levels were “below normal” fell over the quarter.
A net balance of 24 per cent of firms expect output to increase in the next three months – the highest figure since last March and strongly up on the 15 per cent last month.
Meanwhile a balance of eight per cent described their order books as below normal, and although that is worse than the three per cent in February it is better than historic averages.
Exports also took a small hit, with a balance of 11 per cent reporting lower than normal order levels, up from two per cent a month ago, but again that remains better than the 26 per cent registered in January.
The survey showed prices on the increase, with a net balance of 24 per cent reporting prices rising on domestic orders, compared with 10 per cent in February. “This probably reflects the recent rise in oil prices,” said CBI economist Ian McCafferty.
“Any further rise in oil prices would be a significant concern, given the additional cost burden this would place on UK manufacturers and the knock-on effects it could have on the nascent recovery.”