Britain's factories have their strongest order books in six months but a rising pound could start to weigh on exports, the CBI has warned.
The strength in orders was reflected across the manufacturing sector in June, but firms operating in the food and drink sector were in the best shape with the fullest books in almost four years, the business lobby group said.
Katja Hall, the CBI deputy director general, added: "Growth is broad-based, with the recovery spreading its roots, and firms have high hopes for the coming quarter. However, the recent rise in sterling could impact on the resilient export orders we've seen lately."
A strong pound makes British goods more expensive abroad, but imports cheaper. The pound has strengthened in recent weeks amid rising speculation that the Bank of England could raise interest rates before the end of 2014.
It would be the first increase since March 2009, when the Bank's monetary policy committee cut rates to an all-time low of 0.5% in response to the financial crisis.
Sterling hit a new five-year high against the dollar on Thursday, breaching the $1.70 mark to $1.7028, partly as a result of the US currency's weakness.
Of those firms taking part in the CBI's June industrial trends survey, 34% said total order books were above normal levels, while 23% said they were below normal, giving a balance of +11% which was the strongest since December.
Meanwhile, 23% said their export order books were stronger than normal, and 25% said they were weaker, giving a balance of -2%, indicating the best performance since February.
The CBI said export books were improved in most areas of manufacturing, but were strongest in cars, electronics, and mechanical engineering.
George Osborne has made bigger UK exports a priority in the belief that an economy reliant more upon manufacturing and less upon debt-fuelled spending is key to a more sustainable future.
The chancellor set a target in 2012 of doubling UK exports to £1tn by 2020, and has invested a lot of time in attempting to improve trade ties with some of the world's fastest-growing emerging economies, including China.
Howard Archer, chief UK economist at IHS Global Insight, said: "A buoyant CBI industrial trends survey for June adds to the evidence that the manufacturing sector has sustained a strong performance through the second quarter and has made an important contribution to highly probable ongoing robust GDP growth."
The economy grew by 0.8% in the first quarter of the year, with manufacturing output up 1.4%.
theguardian.com
The strength in orders was reflected across the manufacturing sector in June, but firms operating in the food and drink sector were in the best shape with the fullest books in almost four years, the business lobby group said.
Katja Hall, the CBI deputy director general, added: "Growth is broad-based, with the recovery spreading its roots, and firms have high hopes for the coming quarter. However, the recent rise in sterling could impact on the resilient export orders we've seen lately."
A strong pound makes British goods more expensive abroad, but imports cheaper. The pound has strengthened in recent weeks amid rising speculation that the Bank of England could raise interest rates before the end of 2014.
It would be the first increase since March 2009, when the Bank's monetary policy committee cut rates to an all-time low of 0.5% in response to the financial crisis.
Sterling hit a new five-year high against the dollar on Thursday, breaching the $1.70 mark to $1.7028, partly as a result of the US currency's weakness.
Of those firms taking part in the CBI's June industrial trends survey, 34% said total order books were above normal levels, while 23% said they were below normal, giving a balance of +11% which was the strongest since December.
Meanwhile, 23% said their export order books were stronger than normal, and 25% said they were weaker, giving a balance of -2%, indicating the best performance since February.
The CBI said export books were improved in most areas of manufacturing, but were strongest in cars, electronics, and mechanical engineering.
George Osborne has made bigger UK exports a priority in the belief that an economy reliant more upon manufacturing and less upon debt-fuelled spending is key to a more sustainable future.
The chancellor set a target in 2012 of doubling UK exports to £1tn by 2020, and has invested a lot of time in attempting to improve trade ties with some of the world's fastest-growing emerging economies, including China.
Howard Archer, chief UK economist at IHS Global Insight, said: "A buoyant CBI industrial trends survey for June adds to the evidence that the manufacturing sector has sustained a strong performance through the second quarter and has made an important contribution to highly probable ongoing robust GDP growth."
The economy grew by 0.8% in the first quarter of the year, with manufacturing output up 1.4%.
theguardian.com
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