Orders for products made in the UK improved more than expected this month, however exports orders decreased as the effect of the low pound is still failing to stimulate consistent, widespread demand overseas.
The monthly survey of manufacturers carried out by the Confederation of British Industry (CBI)’s showed the balance of total orders improved from -17 in October to -3 in November, which is way above the long run average of -20.
Out of al manufacturers surveyed, 23% said that their total orders were above normal and 26% said they were below normal, leading to a balance that was better that the consensus forecast of -8%.
Output also increased at a slower pace over the last three months with the volume output balance at 4%.
The survey of 430 manufacturers also revealed that the export order book balance was -11%. This was worse than the previous month’s figure of -6% but still above the average of -19%, which indicated domestic demand was driving manufacturing growth.
Although sterling’s sharp drop has not fed through to a consistent export surge, the input effect of higher costs means manufacturers are planning to increase average selling prices at the fastest pace since January 2015 over the next three months, three quarters of which comes from food and drink sector.
Average selling prices are expected to rise to 19% at their fastest pace since January 2014.
Expectations for production over the coming quarter have however reached their highest level since February 2015 at 24% as 38% predicted growth versus the 15% who predict a decline.
In terms of present stocks of finished foods, 12% of firms said their stock was adequate whereas 10% said they weren’t giving a balance of 3%, the lowest since July 2015.
“It’s good to see manufacturers’ overall order books at healthy levels, and the outlook for output growth remaining robust as we head into Christmas,” said CBI chief economist Rain Newton-Smith.