Manufacturing recovery ‘firmly on track’, says CBI
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The manufacturing recovery is firmly on track and looks set to continue, according to the CBI. It said strong growth in domestic and export has boosted factory output, but added that inflationary pressures are intensifying as companies pass on the growing cost of raw materials.
John Cridland, CBI Director-General, said: "The manufacturing recovery remains firmly on track. Strong demand at home and abroad and rapid restocking over the past quarter have led to another solid rise in production, with growth expected to continue over the next quarter.
"It is also good news that manufacturers are continuing to take on more staff to handle the increased workload."
More than 450 manufacturers responded to the CBI's April Quarterly Industrial Trends Survey. Of the respondents, 36% said they had seen an increase in output in the last three months, while 15% said it had fallen. This was driven by a 15% jump in domestic orders and a 24% increase in export business. According the CBI, these growth rates are the fastest since April 1995.
Noting demand and production are expected to continue rising over the next three months, the CBI report also found companies have been building inventories of raw materials, work in progress and finished goods at almost unprecedented rates.
However, a rapid increase in production costs has been detected, with a balance of 53% of respondents claiming average unit costs had gone up.
The survey found investment intentions remain strong. In particular, firms plan to spend more on plant and machinery and product and process innovation during the coming year, relative to the previous twelve months.
