The CBI announced today that Britain’s struggling manufacturers are able to compensate for the lack of demand in the domestic market due to the fact that the export books are the strongest that they have been over the last 18 months.
The organization stated that overall the growth of output is slowly fading, which is making many start to doubt how strong the economy recovery will actually will be.
Over a quarter of firms report that they will increase their production within the next three months while a fifth of the firms plan to reduce their overall output. This creates a +5 balance of percentage points compared to February’s balance of +7.
Due to the fact that UK overseas good sales have strengthened due to the weak pound, the CBI reported that the order books were starting to look better with 22% of firms back at normal and only 40% stating they were below normal. This balance of -18 points is the best it has been since August of 2008.
Despite the good news, the total order books were still unchanged with over half of manufacturers in the UK reporting they are below normal and a small 14% reporting their order books at normal.
CBI chief economic adviser, Ian McCafferty, stated that the survey shows that the export orders from the UK are starting to gain momentum as the international demand is starting to grow. He added that demand at home however is still very low which may impair the manufacturing output growth for some time.