Production from United Kingdom manufacturers grew at the fastest pace in more than 20 years in the three months to July, according to a long-running survey.
Manufacturing output in the United Kingdom rose at its fastest rate since the mid 1990s over the past three months, according to the Confederation of British Industry in a survey released today.
Meanwhile the balance of manufacturers reporting order books at a higher level than normal rose to 10 per cent, its strongest quarterly reading since 1988.
In addition, the net balance of manufacturers expecting output to rise over the coming three months rose from 27 per... The outlook for manufacturing appears mixed and the July CBI survey pointed to a marked easing of price pressures, which fuels hope that United Kingdom inflation is close to peaking.
"Output growth among United Kingdom manufacturers is the highest we've seen since the mid-'90s, prompting the strongest hiring spree we've seen in the last three years".
She added that "the flip side is the broader hit to consumer spending power across the economy from stronger inflation, which is likely to have fueled the slowdown in the economy in Q1 and is expected to pull down growth in Q2".
However, it is highly likely that when second quarter GDP data is released on Wednesday, it will show that manufacturing output contracted in the second quarter.
Andrew Wishart at Capital Economics was heartened by the fairly upbeat tone the survey despite the headline total orders balance falling.
However, the study is based on a relatively small sample of several hundred businesses, and so far there has been little evidence in larger surveys or in the official economic data of a surge in factory output.
Other surveys, like the Markit/CIPS PMI, have shown a slightly less positive picture for British manufacturing output and exports.
"Despite the largely upbeat July CBI survey, the outlook for manufacturing appears mixed". However, the quarterly survey shows that manufacturers are at their most upbeat for four decades over the prospects for future export orders.
Dennis de Jong, the managing director at trading platform UFX.com, said the CBI survey offered "some light relief" after a run of GDP growth downgrades by the International Monetary Fund and Bank of England.
"All aspects of the UK's economy, particularly manufacturing, will rely heavily on the success of Brexit negotiations".