Orders to manufacturers have hit a 30-month high, convincing managers that the upturn is here to stay.
The CBI survey’s total order book balance unexpectedly jumped this month to -3 from -15 in November, well above economists’ forecasts of a reading of -13 and its highest since June 2008.
The strong performance was helped by a sharp increase in export orders, which reached their highest level in fifteen years, according to Samuel Tombs of Capital Economics.
The data “suggests that problems in the Eurozone have not had any adverse effect on the UK’s manufacturing recovery yet,” he said.
An increase in consumer goods is partly responsible for the good performance, the CBI survey said. Consumer good producers saw the most marked improvement on November, and reported the largest advancement in exports.
However, the survey also threatened further rises in inflation.
A total of 27 per cent of respondents expect their prices to increase over the next three months, compared to just 11 per cent who expect a fall.