Data collected over the past quarter shows the volume of domestic orders rose at their fastest pace since July 2014 (+16%), while export orders rose more moderately (+5%) but below expectations (+17%).
Nearly four in 10 (37%) of the 461 manufacturers surveyed also reported an increase in total orders, while 21% reported a decrease – giving a balance of +16%.
Rain Newton-Smith, CBI chief economist, said that UK manufacturers are “firing on all cylinders”.
Additional findings show 32% of firms said the volume of output between October and December was up and 18% down, giving a balance of +15%, and 22% said employment numbers were up compared to 18% that said they were down – a balance of +4%.
Meanwhile 27% of firms said they were more optimistic about the general business situation than three months ago and 12% less optimistic, giving a balance of +15% - the highest since January 2015.
CBI said that demand is expected to grow over the next quarter, but concerns persist over access to skilled labour. Sterling’s depreciation also continues to impact prices but manufacturers recognise the competitive benefits from the weak sterling, it said.
“The weaker pound is driving export optimism for the year ahead, but is having a detrimental impact on costs for firms and ultimately for consumers,” Newton-Smith added.
“The new Industrial Strategy can support our manufacturing base by offering a shared long-term vision for the key sectors and regions of the economy and evidence-based plans for government and business collaboration.
“The CBI and its members across the country stand ready to support the government in achieving this.”
