Activity in the UK manufacturing sector remained solid in May, and output is expected to rise strongly in the next three months, the latest CBI Industrial Trends Survey shows.
Output volumes continued to grow at the same rate as in the previous two months, and with stronger growth anticipated for the coming quarter.
The survey of 437 manufacturers found that total order books remained well above the long-run average. Export orders fell below normal, mainly driven by the chemicals and automotive sectors, but remained strong by historical standards.
Thirty-six percent of firms said the volume of manufacturing output over the last three months was up. And 21% said it was down, giving a balance of +15% for the third consecutive month.
The CBI said firms expect output to growth in the coming quarter, with 39% predicting growth and 7% predicting a decline, giving a balance of +32%.
But there was disappointing news for exporters. The survey showed that 19% of manufacturing firms said export order books were above normal, but 28% said they were below average, giving a balance of -9%.
Katja Hall, CBI Deputy Director-General, said:
"Overall, the manufacturing sector continues to perform well. Output growth is on an upward trend, with firms expecting an even stronger rise in the next three months.
"Inflationary pressures are under control, with firms now expecting only a slight rise in the selling prices of their goods.
"The recent rise in Sterling, coupled with a tepid recovery in the Eurozone could weigh on export demand. As the UK's economic recovery gains a firmer footing, we need to ramp up manufacturing exports to high-growth markets, driving job creation here in the UK."
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