The latest CBI Industrial Trends Survey shows that orders have increased and optimism has risen

Survey of manufacturers raises recovery hopes

The CBI has said that the UK manufacturing sector is showing signs of bouncing back from the fragile conditions seen at the end of 2011 and start of 2012, and sentiment has improved for the first time in a year.

Orders and output volumes showed modest increases in the three months to April, and momentum is expected to build further in the coming three months.

Overall improvements

A balance of 8 per cent of manufacturers said that orders rose in the three months to April this year, up from -15 per cent when they were last asked in January, the CBI said.

Levels of optimism rose for the first time in a year and were at their highest for two years, while the reading reflecting intentions to invest in plant and machinery was at its strongest since 1997.

The survey of 394 manufacturing businesses showed that a balance of 5 per cent of companies saw output rise in the three months to April.

Further improvements in output and orders are expected over the coming three months.

Planned spend on innovation and staff

Businesses also said that they planned to spend more on innovation and training than at any time since the late 1990s, amid increasing signs of stable demand, and on balance they plan to hire more staff, for the seventh quarter in a row.

CBI Chief Economic Adviser Ian McCafferty said: "With the acute fears over Europe and global demand subsiding somewhat since the start of 2012, sentiment about the general business situation has risen among manufacturers for the first time in a year.

"Firms have seen manufacturing demand and production picking up in the three months to April, and with expectations of a further strengthening in activity in the coming quarter, they're increasing their stock-building and investment plans."

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