UK manufacturing production to pick up

According to the CBI's monthly Industrial Trends Survey, 25% of UK manufacturers expect output to rise in the next three months, while 18% anticipate a fall. The resulting balance of +7% is the strongest figure since March 2008. Exports order books are continuing to improve thanks to the continued weakness of Sterling and improving global demand. 14% of firms said exports were above normal and 38% said they were below normal. The resulting rounded balance of -23% is the least negative since August 2008. Total order books, however, remain more depressed. 10% of manufacturers said they were above normal, while 46% said they were below normal. The resulting balance of -36% is the least negative since December 2008, and a modest improvement on the previous month's balance. CBI chief economic adviser Ian McCafferty (pictured), 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. Given the continued weakness of total orders, growth prospects are likely to remain subdued." David Raistrick, UK manufacturing leader at Deloitte said the figures showed that the manufacturing sector's recovery was gaining momentum. However, he went on: "While the sector's performance appears to be improving, it will be years before output levels return to the heights enjoyed 10-15 years ago when industry represented close to 20% of GDP. Today it makes up a much smaller share at around 13%. "In order for the UK manufacturing sector to gain this extra 50% to return to its former production levels and enjoy long term stability, the focus must be on areas where the UK excels, such as high-tech manufacturing."