The British manufacturing sector saw its best month since 1988 in June, according to the latest survey from the Confederation of British Industry.
The CBI’s factory order book balance jumped to +16 in June, almost doubling from May’s figure of +9.
Export orders also hit a 22 year high, helped by the fall in the pound that was triggered by last year’s Brexit vote. The figures will come as good news to those hoping to demonstrate the strength of British industry outside the European Union.
The CBI commented on the results:
“The survey of 464 manufacturers found that total order books climbed to the highest level since August 1988. This was underpinned by a broad-based improvement in 13 of the 17 sub-sectors, led by the food, drink & tobacco and chemicals sectors.
“Export orders also improved to a 22-year high, hitting similar peaks to those seen in 2011 and 2013.”
However, Howard Archer, chief economic advisor to the EY ITEM Club, suspects that the CBI may be over-egging the strength of UK manufacturing.
“There is the concern that survey evidence for the manufacturing sector has tended to be markedly more upbeat than the official data from the Office for National Statistics (ONS) so far in 2017.
“Indeed, official data suggests that the manufacturing sector is far from guaranteed to see even modest growth in the second quarter. Specifically, latest ONS figures show manufacturing output edged up 0.2% month-on-month in April after falling in each of the first three months of 2017.”
The figures will also be watched carefully by Bank of England policymakers, who are in the throes of indecision over when to raise interest rates.
The Monetary Policy Committee was split at last month’s meeting by 5 – 3, with Bank of England governor Mark Carney sending the pound into chaos on Tuesday after saying that now was not the right time for a rate hike.