CBI survey shows expectation of strong growth

Of the 420 manufacturers that responded to the Quarterly Industrial Trends Survey, 32 per cent expect a rise in output volumes, and 14 per cent a fall, giving a balance of +18 per cent. This follows a figure of +9 per cent for the previous three months. This is primarily driven by expectations of a faster increase in exports in the coming quarter, with a balance of +15 per cent expecting volumes of export orders to rise. Domestic order growth is more subdued with a balance of +2 per cent expecting an increase. Looking ahead to the next quarter, the volume of total new orders is expected to grow to a balance of +12 per cent, similar to the +11 per cent recorded for the past three months. Following four consecutive quarters of rising optimism, overall business sentiment was little changed on three months ago. The survey showed that 24 per cent of manufacturers said that they were more optimistic than the past quarter, and 23 per cent said they were less so, giving a rounded balance of +2 per cent. Ian McCafferty, the CBI's chief economic adviser, commented: "The recovery in the manufacturing sector is well grounded and looks set to continue, despite a soft patch last quarter, when production growth slowed as firms had expected. Over the next three months, firms predict a strong rise in output driven by predictions of firmer export orders growth, while support from stockbuilding fades."