A surge in exports has left UK firms feeling more optimistic about selling overseas than they have in over four decades, one of the UK’s leading business groups has reported.
Export orders in the first quarter (Q1) of 2017 grew at their fastest rate in six years, while domestic orders rose more rapidly than they have since July 2014. The optimistic outlook is recorded in the latest CBI Industrial Trends Survey.
Covering the period to the end of March, the survey of 397 manufacturers shows growth in export orders rising to +22% – the highest level since the +24% reached in April 2011.
Domestic orders over the quarter rose at +20%, which was the fastest rise recorded from the +23% in July 2014.
The quarterly survey also found that, with 42% of businesses experiencing an increase in total orders and 17% reporting a decrease, the balance of +25% was the highest recorded since April 1995 (when it was +27%).
Looking ahead, growth is anticipated in total new orders (+14%), domestic orders (+7%) and export orders (+24%) over the next quarter.
However, average domestic prices (+29%), export prices (+20%) and unit costs (+41%) are also expected to rise quickly in the coming three months with the rise in unit costs being the strongest in six years.
CBI Chief Economist Rain Newton-Smith said that UK manufacturers are enjoying strong growth in demand from customers in the UK and overseas, and continue to ramp up production.
“Even so,” she added, “the combination of the weak pound and recovering commodity prices means that cost pressures continue to build, and manufacturers report no sign of them abating over the near-term.”
