Survey of manufacturers raises hopes of a quick recovery
Hopes that the recession will prove short-lived were given a boost yesterday after a survey showed that manufacturers made a positive start to the second quarter of 2012.
A balance of 8% of manufacturers said that orders rose in the three months to April this year, up from -15% when they were last asked in January, the CBI said.
Levels of optimism rose for the first time in a year and were at their highest for two years, while the reading reflecting intentions to invest in plant and machinery was at its strongest since 1997.
The survey will add to optimism after figures revealed it failed to return to growth in the first quarter, contributing to the slide back into recession.
CBI director general John Cridland said he was surprised that the economy contracted in the first three months of the year.
"Since the turn of the year, business confidence has improved and, while still challenging, underlying economic conditions also appear to have strengthened," he said. "Looking forward, there are indications that the economy is slowly recovering from the blow to confidence and activity which resulted from last autumn's turmoil in eurozone financial markets."
The survey of 394 manufacturing businesses showed that a balance of 5% of firms saw output rise in the three months to April.
Further improvements in output and orders are expected over the coming three months.
Firms also said that they planned to spend more on innovation and training than at any time since the late 1990s, amid increasing signs of stable demand.
And on balance they plan to hire more staff, for the seventh quarter in a row.
CBI chief economic adviser Ian McCafferty said: "With the acute fears over Europe and global demand subsiding somewhat since the start of 2012, sentiment about the general business situation has risen among manufacturers for the first time in a year.
"Nevertheless given Europe is still our biggest export market, the outlook for UK manufacturing will remain uncertain until the eurozone crisis is resolved."