Manufacturers reported a rebound in orders and expect moderate growth in output over the next three months, according to the CBI.
The CBI Monthly Industrial Trends Survey for February surveyed 436 manufacturers, of which 15 per cent responded that total order books were above normal and 29 per cent said they were below, giving a balance of -14 per cent.
This represents an increase of 6 points from the January survey and is a little above the long-run average (-17 per cent).
Export order books also improved somewhat, registering a balance of -20 per cent in line with the long-run average (-21 per cent), but remained well below December levels (-11 per cent).
Looking ahead, manufacturers expect some moderate growth in output over the next quarter (+5 per cent), driven mainly by motor vehicles and transport equipment and food, drink and tobacco.
Expectations for output price inflation for the next quarter remain high (+20 per cent).
Motor vehicle and transport equipment manufacturers reported its strongest inflation expectation in four years, offsetting the cooling of price expectations in the food, drink & tobacco sector.
Anna Leach, CBI head of Economic Analysis, said: “The rebound in manufacturing orders and expectations for output growth provide some further signs of improvement in the outlook for the UK economy.
“However, export order books are likely to remain relatively weak until global conditions, especially in the Eurozone, improve more markedly.”