Business optimism among manufacturers saw its sharpest improvement since 1973, on the back of strong growth in orders at home and abroad, according to the latest CBI quarterly Industrial Trends Survey.
The survey of 405 manufacturers found that in the three months to April 2014, growth in total order books and domestic orders was the fastest since 1995. Export orders grew strongly, while investment intentions for the year ahead remained particularly robust. Output growth was solid again for the second consecutive quarter, while numbers employed rose at the strongest rate since October 2011.
Companies are upbeat about the next quarter, with growth expectations for domestic orders and output also the highest since the 1970s. Optimism about export prospects for the year ahead also rose strongly.
Signs of a continued recovery in the manufacturing sector appear to be feeding through to investment plans over the next 12 months, with plans for capital expenditure on plant and machinery (relative to last year) the highest for 17 years. Investment plans for innovation and training and retraining also remain robust.
CBI chief policy director, Katja Hall, said: “Confidence is rapidly rising among British manufacturers, with a real sense of business optimism. Our industrial base is seizing a bigger role in the UK’s economic recovery, with output, orders and hiring all on the up.”
She added: 'There are still bumps in the road ahead, with only a tepid recovery likely in the Eurozone, the pound creeping higher and a rapidly evolving situation in Ukraine. However, expectations for growth in the coming three months are positive and manufacturers plan to significantly ramp up investment in the year ahead.'