MANUFACTURERS have provided some comfort for the UK economy by forecasting moderate growth in their output over the coming quarter.
The CBI’s monthly industrial trends survey showed signs of a rebound in orders, although economists said the pace of the recovery remained sluggish due to continued turmoil in the eurozone.
In a poll of 436 manufacturers, 15 per cent said total order books were above normal while 29 per cent said they were below.
The balance of minus 14 per cent was six points better than the January survey.
Export order books also showed some improvement, although City experts fear firms may use the weaker pound to boost margins rather than volumes.
Looking ahead, a positive balance of five per cent of companies expected some moderate growth in output over the next quarter, driven mainly by those in the motor and food, drink and tobacco sectors.
The CBI’s head of economic analysis Anna Leach said: “The rebound in manufacturing orders and expectations for output growth provide some further signs of improvement in the outlook for the UK economy.
“However, export order books are likely to remain relatively weak until global conditions, especially in the eurozone, improve more markedly.”
The industrial sector was a significant drag on the wider economy at the end of last year, contributing to the worse-than-expected 0.3 per cent decline in gross domestic product (GDP) in the fourth quarter of 2012.
The GDP blow raised fears the UK was heading for an unprecedented triple-dip recession.
But recent surveys from factory bosses have fuelled hopes that the worst may be over for the sector, which accounts for more than 10 per cent of the economy.
Samuel Tombs, an economist at consultancy Capital Economics, said evidence from sterling’s much bigger depreciation in 2008 was underwhelming, with exporters allowing sterling’s fall to boost their margins rather than volumes.
He added: “What’s more, the latest surveys from the eurozone suggest that the UK’s biggest export market is still in recession.
“As a result, there seems little reason to expect the industrial sector to materially support growth in the overall economy this year.”