Export hike in manufacturing
BRITAIN’S manufacturers are more confident about winning overseas orders over the next year than at any time since the early 1970s after exports rocketed during the first quarter.
With the weak pound making UK goods more competitive, export orders have grown at the fastest rate for six years as demand from non-EU markets improved at a record pace.
A survey of nearly 400 manufacturers by business organisation the CBI also showed demand from domestic customers at its strongest since July 2014, although costs are rising at their quickest for six years.
The boost for manufacturing, which makes up about 10 per cent of UK economic output, added gloss to a £35billion-plus surge in the value of Britain’s top companies as global stock markets enjoyed a relief rally on the back of business-friendly French presidential candidate Emmanuel Macron topping the country’s first-round election poll.
The FTSE 100 jumped 150 points to 7264, while European markets were up by an average 4 per cent and the euro gained by over 1 per cent against the pound and the US dollar. America’s Dow Jones index also forged ahead on hopes of tax reforms by President Trump.
Expectations for export orders growth are at their strongest in more than two decades, although manufacturers anticipate overall new orders will grow more moderately over the near-term due to slowing domestic demand.
Companies are also planning to reduce investment in plant and machinery, while hiring intentions for the next three months are “muted”.
CBI chief economist Rain Newton Smith said: “UK manufacturers are enjoying strong growth in demand from customers in the UK and overseas, and continue to ramp up production.
“Exports have surged and firms are at their most optimistic about selling overseas for over four decades. Even so, the weak pound and recovering commodity prices mean cost pressures continue to build, and manufacturers report no sign of them abating over the near-term.”