International buyers boost UK industry order books

BRITAIN’S buoyant manufacturing industry has seen its strongest order book level for nearly three decades thanks to robust demand from overseas buyers, according to a report.

The CBI industrial trends survey saw total orders in the three months to November hit the highest rate since August 1988, with the chemicals and food industries enjoying a bright period.

Export order books reached a joint 20-year high, as the Brexithit pound fuels an appetite for British goods by making them cheaper on international markets.

While output also accelerated during the period, growth is expected to slow for the three months to February.

Anna Leach, the CBI’s head of economic intelligence, said: “UK manufacturers are once more performing strongly as global growth and the lower level of sterling continue to support demand. Output growth has picked up again, and export order books match the highest in more than 20 years. Nonetheless, uncertainty continues to hold back investment and cost pressures remain strong.Manufacturers will be hoping the Budget brings some relief from the business rates burden in particular.”

The survey of 397 manufacturers said total order books had a balance of plus-17%, with 28% of firms reporting levels above normal. Output growth expectations for the upcoming quarter also enjoyed a positive balance of plus-13%, as 27% of manufacturers expect volumes to rise.

Howard Archer, EY ITEM Club’s chief economic adviser, said: “The CBI industrial trends survey points to manufacturing orders picking up strongly in November to be at the highest level for nearly 30 years. There was also a marked rise in the number of manufacturers reporting that their output had risen over the past three months.

“Specifically, the total orders balance surged to plus-17% in November – which was the highest reading since August 1988 – having previously fallen back to an 11-month low of minus-2% in October from plus-7% in September and plus-13% in August. It was substantially above the longterm average of minus-14%.”

The update comes after Office for National Statistics (ONS) figures earlier this month showed industrial production unexpectedly grew by 0.7% month on month in September, recording its sixth straight month of growth for the first time in 23 years.

Manufacturing output climbed 0.7% in September, driven by “robust growth” in cars and medical equipment.

The UK economy accelerated to 0.4% in the third quarter, with the lion’s share of expansion coming from the services and manufacturing industries.