UK manufacturing sector showing signs of recovery

The Confederation of British Industry (CBI) has said that the struggling UK manufacturing sector is beginning to show signs of recovery.

In its latest snapshot of industrialists' views its Quarterly Industrial Trends Survey showed that confidence among manufacturers had risen for the first time in more than two years. However, the decline in orders, output and employment continued over the past four months.

Commenting on the survey, Ian McCafferty, CBI Chief Economic Adviser said: "The deepest manufacturing recession for over a decade appears to be on the turn.

"Expectations of small rises in orders and output have led to manufacturers becoming significantly more optimistic. This is good news but any recovery at this stage will remain fragile. It will be some time before employment stops falling and firms start investing again."

Looking back over the past four months export orders fell again, albeit at a much slower rate. The difference between firms reporting a rise in export orders and those reporting a fall gives a balance of minus 18%, compared to minus 36% in January.

Domestic orders also fell over the past four months, a balance of minus 12% compares with minus 16% in January. As a result, output also fell and strikingly, the number of firms working below capacity increased from 66 % in January to72 %, a level not recorded since January 1993.

(MB)