According to the latest CBI Quarterly Industrial Trends Survey, the recovery in British manufacturing continued in the three months to April, but the speed of growth slowed and export orders remained sluggish.
The survey of 468 firms reported an easing of growth in total new orders, but this still stayed well above average. Domestic orders rose modestly, whilst exports growth remained unexpectedly slow. Meanwhile output growth fell to its lowest level since January 2013, but above the long-run average.
Looking forward, companies have stronger expectations for the three months ahead, with output and orders growth anticipated to firm up and predictions for exports growth at their strongest since July 2014. However, the number of firms highlighting orders or sales as a possible constraint to activity rose to its highest level since October 2013.
CBI deputy director-general, Katja Hall, said: 'It’s encouraging that our manufacturers are seeing - and expect to see - continued growth, with rates of expansion still above average.
'Exports keep dragging at the heels of growth: firms are finding the recent rise in the Pound against the Euro challenging, making them less competitive in Europe, while the unravelling situation in Greece is creating uncertainty.
She added: 'Among the measures business wants in the first 100 days of a new government, an ambitious, long-term export strategy must be a central element to keep growth on course.'
Separately, the CBI has published monthly figures for April, which show that total order books for manufacturers (+1%) remained in line with normal levels (0%). Export orders were below par (-11%), but were above their long-run average (-20%).