Manufacturing output in the UK 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.
It said the quarterly balance for manufacturing rose to +31 in the three months to July, the highest reading since January 1995. In the three months to April, the reading stood at +22.
CBI added that expectations for export order growth in the quarter ahead were the strongest in 40 years, despite a moderation over the past quarter.
Headcount increased at the quickest rate in three years and hiring intentions strengthened while cCost pressures cooled and are expected to soften further in the near-term, it added.
Investment intentions bounced back across the board, particularly for training and retraining, where spending plans for the year ahead are the highest in over two years, CBI said.
Rain Newton-Smith, CBI Chief Economist, said: “Output growth among UK manufacturers is the highest we’ve seen since the mid ‘90s, prompting the strongest hiring spree we’ve seen in the last three years. Cost pressures are easing and firms are upbeat about the outlook for export orders."
Newton-Smith added that : “It’s great to see the benefits from the decline in sterling for UK exporters feeding through. But the flipside is the broader hit to consumer spending power across the economy from stronger inflation, which is likely to have fuelled the slowdown in the economy in Q1 and is expected to pull down growth in Q2.”