Manufacturing demand best in 21 months

Manufacturing orders have continued to improve with order books at their strongest in 21 months, new data has shown.

The Confederation of British Industry’s (CBI) industrial survey for August has showed the balance of manufacturers reporting 'below normal' orders rose to 5%, an improvement on August’s minus 8%.

The figure is the survey’s strongest recording since December 2004 when it was minus 4%.

The level of export orders has also increased, driven by a considerable boost in demand for capital goods. This has led to stronger expectations for output over the coming months.

Ian McCafferty, the CBI’s chief economic adviser, said: “Demand for British-made goods is continuing, helped by the strength of the world economy.”

However, he predicts overseas demand will plateau next year.

“Overall, the sector is doing better than it has for some time, but concern remains over how long this can go on," he said.

The upturn in activity also seemed to boost confidence, as the survey found that 14% of firms expect their output to increase over the next three months.