UK manufacturing positive for short term

UK manufacturers are more positive about the near-term outlook, according to June’s ‘Monthly Industrial Trends’ survey by the CBI. The proportion of manufacturers expecting to increase output over the next three months is the highest since February 2005 – a positive balance of 14%, with 31% expecting an increase and 17% a decrease. The level of total order books in June is at a similar level to the past two months and better than most of the past year: 20% of firms report above normal total orders this month while 32% say they are below normal (making a balance of -12%). April’s balance of -11% was the strongest since February 2005 (-10%). The balance of demand for export orders, at -3%, was little changed from May’s zero balance – the healthiest figure for over a decade. Demand in June for UK consumer exports was much improved on May and overseas demand for intermediate goods was slightly better. However, export demand for capital goods fell back. CBI chief economic adviser Ian McCafferty (pictured) said: “The outlook for manufacturing is positive in the short-term, driven by export growth and continued strong performance in the eurozone. Longer-term prospects, however, are more uncertain for the sector.”