CBI survey backs talk of strong manufacturing recovery
The export order balance turned positive, rising to 3 from -16, its highest level since March 2008
British factory orders surged this month, especially from abroad, as manufacturers benefited from the weak pound and a pick-up in global trade.
The CBI's industrial trends survey for May showed that manufacturers' orders are still falling but at much slower rate than before, raising hopes that the recovery in industry is gathering steam.
The total orders balance improved to -18 from -36 in April, well above expectations of -32 and the best reading since August 2008.
The export order balance turned positive, rising to 3 from -16, its highest level since March 2008. Manufacturers' output expectations for the coming months also hit a two-year high, climbing to 17 from 14.
"The weak pound has made UK exports more attractive, and manufacturers are benefiting from the pick-up in world trade," said Ian McCafferty, the CBI's chief economic adviser.
"This is helping the recovery in manufacturing, and a slightly stronger rise in production is predicted in the coming months."
The pound hit a 13-month low against the dollar today and also slipped against the euro. Sterling dropped more than 1% to $1.4253, its lowest since late March 2009, earlier this morning.
Official figures showed last week that industrial production surged in March, rising at its fastest pace in almost a decade. However, on Thursday, trade figures suggested that exporters are still struggling, with Britain's trade gap widening to £7.5bn in March.
Source: guardian.co.uk