UK manufacturers built 91,282 cars in August, up 16.2 per cent on the same period in 2012

Manufacturing recovery gathering pace

Manufacturing order books are at their fullest since the start of the financial crisis and car production has leapt ahead.

A CBI survey shows 28 per cent of firms reported total order books above normal in September and 19 per cent said they were below. The positive balance of 9 per cent was the highest since August 2007. This included a 6 per cent positive balance for export orders, reversing a negative in figures recorded for last month.

The CBI’s Industrial Trends Survey of 398 companies also found output growth rose again, to a balance of 18 per cent – the highest level since August 2011 – and a positive balance of 33 per cent of firms expected to raise output over the next three months.

Stephen Gifford, CBI director of economics, said: "This month's results show the manufacturing recovery continues to gather pace. Order books are the fullest they've been since the start of the financial crisis, and firms are ramping up production to meet demand.

"Firms are more upbeat about growth prospects in the coming quarter than at any time since 1995."

Meanwhile the Society of Motor Manufacturers and Traders (SMMT) said UK manufacturers built 91,282 cars in August, up 16.2 per cent, or 12,705, on the same period in 2012, leaving year-to-date volumes 3.1 per cent ahead of 2012, at 984,545.

The figures showed 20,298 cars were made for the home market this year, up 21.1 per cent, while 70,984 were for export, up 14.8 per cent.

SMMT chief executive Mike Hawes said: "The past 12-months has been one of the most productive since late 2008.”

Samuel Tombs, of consultancy Capital Economics, said the CBI figures showed the manufacturing sector "continuing to go from strength to strength".

Howard Archer, chief UK and European economist at consultancy IHS Global Insight, said: "An all-round robust CBI industrial trends survey for September, coupled with news that car manufacturing output was up 16.2 per cent year-on-year in August, indicates that the manufacturing sector has had a very decent third quarter and contributed to likely stronger GDP growth.

"Furthermore, the strong manufacturing order books in September reported by the CBI bodes well for manufacturing output in the fourth quarter."

John Leech, head of automotive at KPMG in the UK, said: "Soaring UK car production is being fuelled by rising demand from both the UK and the Eurozone."

He said that while the latest figures may be flattered by the poor results this time last year as Greek and Spanish debt crises gathered pace, UK car production looked set to carry on rising and reach 1.9 million in three years.

The shift towards higher-priced vehicles pointed to a record trade surplus in cars of £8bn for 2016, Leech added.

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