Britain's manufacturers have cranked up production to its highest level for two years, according to business group the CBI, in the latest piece of evidence that the economy is picking up speed.
In its quarterly survey of the recession-scarred sector, the CBI said that 37% of firms had reported rising output, compared with 21% saying it had fallen.
The resulting balance, of +16%, was the strongest since August 2011. News that manufacturers are feeling more optimistic will help to calm fears that the UK is experiencing an unsustainable, "Alice in Wongaland" recovery, based solely on consumer spending.
Sparking an industrial revival is a key part of the coalition's strategy for rebalancing the economy, away from debt-fuelled consumption and towards exports.
George Osborne used his first budget, in 2010, to promise a "march of the makers".
Sterling jumped to a two-month high of $1.5697 against the dollar after the news, as analysts continued to bet on a stronger upturn for the economy than the Bank of England is forecasting.
The CBI said that the increase in output was broad-based, with 12 of 16 manufacturing sub-sectors reporting an upturn. Some of the strongest rises were in building materials, metal manufacture and electrical goods.
Orders were also at their strongest for two years, the CBI said, with both domestic and export orders picking up. Firms were also upbeat about the outlook for the next three months, with a balance of +25% expecting to increase production further.
The latest official figures showed that manufacturing output increased by 0.7% over the second quarter of the year – though it remains more than 10% below its peak before the financial crisis.
Stephen Gifford, the CBI's director of economics, said: "UK manufacturers seem to be experiencing a build-up in momentum, but risks in the global economy still mean that it won't be plain-sailing for some time to come."
theguardian.com
In its quarterly survey of the recession-scarred sector, the CBI said that 37% of firms had reported rising output, compared with 21% saying it had fallen.
The resulting balance, of +16%, was the strongest since August 2011. News that manufacturers are feeling more optimistic will help to calm fears that the UK is experiencing an unsustainable, "Alice in Wongaland" recovery, based solely on consumer spending.
Sparking an industrial revival is a key part of the coalition's strategy for rebalancing the economy, away from debt-fuelled consumption and towards exports.
George Osborne used his first budget, in 2010, to promise a "march of the makers".
Sterling jumped to a two-month high of $1.5697 against the dollar after the news, as analysts continued to bet on a stronger upturn for the economy than the Bank of England is forecasting.
The CBI said that the increase in output was broad-based, with 12 of 16 manufacturing sub-sectors reporting an upturn. Some of the strongest rises were in building materials, metal manufacture and electrical goods.
Orders were also at their strongest for two years, the CBI said, with both domestic and export orders picking up. Firms were also upbeat about the outlook for the next three months, with a balance of +25% expecting to increase production further.
The latest official figures showed that manufacturing output increased by 0.7% over the second quarter of the year – though it remains more than 10% below its peak before the financial crisis.
Stephen Gifford, the CBI's director of economics, said: "UK manufacturers seem to be experiencing a build-up in momentum, but risks in the global economy still mean that it won't be plain-sailing for some time to come."
theguardian.com
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