The latest CBI Industrial Trends survey shows that both the size of total order books and the pace of output growth over the past three months were the highest recorded since 1995, showing the recovery in UK manufacturing is accelerating.

The survey of nearly 350 manufacturers found that total order books relative to normal levels were their strongest since March 1995. Thirty-six per cent of firms reported that total order books were above normal in November, and 25 per cent said they were below, giving a balance of +11 per cent. This is the highest balance since March 1995.

Export order books were also very firmly above average, with a balance of +1 per cent, well above the long-run average of -20 per cent.

Output volumes over the three months to November rose at their fastest rate since January 1995, with all but one sector (electrical engineering) reporting growth.

Manufacturers expect output growth to continue at a robust pace over the coming three months.

“This new evidence shows encouraging signs of a broadening and deepening recovery in the manufacturing sector. Manufacturers finally seem to be feeling the benefit of growing confidence and spending within the UK and globally,” says Stephen Gifford, CBI director of economics. 

“Both order books and the pace of output growth are the strongest they’ve been since 1995, and firms are expecting similar-paced growth over the coming three months as well.”

Gifford warns that challenges remain, however. UK exporters need government support to break into high-growth markets, which would then reduce their vulnerability to any further Eurozone “flare-ups”, he said.

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