Manufacturers are enjoying their strongest pipeline of orders for nearly 30 years as the weak pound helps boost demand for “Made in Britain” goods, according to a survey.
The CBI’s latest monthly report showed the balance of companies reporting that total order books were above normal surged from +9 in May to +16 in June - the highest reading since August 1988.
It revealed that export orders also rose to a 22-year high.
The report will boost hopes the manufacturing sector can help offset a slowdown in consumer spending as households feel the squeeze from surging inflation caused by the weak pound and tepid wage growth.
The CBI called for the Government to “put the economy first” in Brexit negotiations to support manufacturers and wider economic growth.
Rain Newton-Smith, CBI chief economist, said: “Britain’s manufacturers are continuing to see demand for ‘Made in Britain’ goods rise with the temperature.
“Total and export order books are at highs not seen for decades, and output growth remains robust.”
She added: “To build the right future for Britain’s economy, manufacturers and workers, the Government must put the economy first as it negotiates the country’s departure from the EU.
“This approach will deliver a deal that supports growth and raises living standards across the UK.”
The survey showed the jump in order books was underpinned by an improvement in 13 of the 17 sub-sectors, led by the food, drink, tobacco and chemicals industries.
But the survey showed ongoing pressure from the Brexit-hit pound, with manufacturers continuing to expect a sharp rise in average selling prices.
The balance of companies expecting prices to rise in the coming months remained unchanged at +23 points between May and June.
This is up from +1 a year ago.
Howard Archer, chief economic adviser to the EY Item Club, said the CBI report was “highly encouraging”.
He added: “This points to healthy domestic demand despite concerns of a stuttering UK economy.
“Export orders are at a 22-year high, clearly benefiting from a weakened pound and strong global growth.”