Export order books in the UK have reached a two-year high, according to new research from the CBI, revealing that chemical manufacturers have actually accounted for more than half the improvement in this regard.
The latest monthly Industrial Trends Survey has found, however, that although exports have improved, total order books remained relatively unchanged. Output growth retains a healthy pace, but it did seem weaker than when compared to the three months leading up to July.
In all, 19 per cent of firms said total orders were above normal, while 21 per cent of companies reported that export orders were above normal and 34 per cent said they’d seen a rise in output volumes.
Head of economic analysis and surveys with the CBI Anna Leach commented on the news, saying how positive it is to see growth in manufacturing output emerging stronger than expected, with some signs indicating that the drop in sterling has actually helped to boost export orders.
She did add, however: “But the pound’s weakness is a double-edged sword, as it benefits exporters but also pushes up costs and prices. Manufacturers will welcome the new government’s focus on industrial strategy as well as the chancellor’s recent guarantee over EU funding, which will help to provide certainty for universities and businesses investing in innovation and research and development.”
At the start of August, the CBI found that small to medium-sized enterprises saw a hike in the volume of output in the three months to July, but also saw that business optimism dropped sharply, with investment intentions relating to machinery, planting and buildings being scaled back. This was put down to increasing uncertainty relating to the Brexit vote, so it’s likely this will change once Article 50 is invoked and businesses have a clearer idea of the government’s action plan for leaving the EU.