Manufacturers are the most positive about output prospects in almost two years despite “feeble” demand, the CBI business group said yesterday.
Its industrial trends survey for this month showed a 7% balance of firms expected output to rise in the next three months — the strongest figure since March 2008.
Total order books remained low and a balance of 36% reported below normal levels, although this was the least negative since December 2008. Exports continued to be supported by the weakness of sterling. A balance of 23% of companies said exports were lower than normal, the best figure since August 2008.
Ian McCafferty, CBI chief economic adviser, said: “Manufacturing production is slowly recovering as demand for UK-made goods overseas is improving, boosted by the relative weakness of sterling.
“Stock levels are now much closer to requirements, suggesting the period of aggressive destocking is now over. However, while exports are providing some welcome support, overall demand remains feeble.”
He added that the continued weakness in total order books meant growth prospects were “likely to remain subdued”.