The manufacturing sector expects a solid rise in output over the next three months driven by predictions for a stronger increase in export orders, the CBI said on October 19th. The UK's leading business group said that this follows an easing of production growth in the past quarter.
Of the 420 manufacturers that responded to the Quarterly Industrial Trends Survey, 32% expect a rise in output volumes, and 14% a fall, giving a balance of +18%. This follows a figure of +9% for the last three months.
This is primarily driven by expectations of a faster increase in exports in the coming quarter, with a balance of +15% expecting volumes of export orders to rise. Domestic order growth is more subdued with a balance of +2% expecting an increase.
Employment and investment trends in the manufacturing sector are positive. Employment saw the greatest rise since January 1989 with a balance of +6% of firms saying that they had taken on new staff.
In addition, investment intentions for the coming year have strengthened further. Manufacturers said they plan to spend more on plant and machinery over the year ahead: a balance of +10% said that they would increase capital expenditure in this area, with investment plans at their strongest since July 1997 (+21%).
Furthermore, fewer manufacturers (41%) think uncertainty about demand will limit their investment plans over the next 12 months. This is the lowest figure since January 2008 (41%) and compares with 54% for the previous quarter.
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