Business optimism in manufacturing sector sees sharpest rise since 1973

The level of business optimism in the manufacturing sector has recorded its sharpest rise since 1973 as a direct result of growing demand, both at home and abroad, the latest CBI quarterly Industrial Trends Survey has revealed.

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.

Figures obtained from the report suggest that 36% of manufacturers expect total new orders to increase and 10% expect them to fall, giving a balance of +26%, the highest since October 1996 (+27%).

Furthermore, a balance of +26% expect new domestic orders to rise (34% expect an increase and 8% a fall), the highest since April 1977 (+29%) and +22% expect new export orders to go up (33% expecting an increase and 11% a fall), while 41% of firms anticipate a rise in output volumes and 10% a fall, giving a rounded balance of +32%. 27% expect employment to increase and 11% expect it to decline, giving a balance of +16%.

Another interesting finding is that the manufacturers' investment intentions for the year ahead compared with the previous 12 months improved sharply for plant & machinery (to +16% from +4%). They also remained robust for product & process innovation (+27%) and training (+26%).

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