UK Manufacturing highest in 15 years

Small businesses operating in the manufacturing sector are the most optimistic about export prospects for the year ahead since October 1995, according to recent research conducted by the Confederation of British Industry (CBI).

A total of 418 small manufacturing firms were surveyed by the CBI. According to the survey 27% of firms reported an increase in the volume of export orders in the three months leading up to January, while 25% reported a fall. According to the CBI the balance of 2% is the strongest figure since January 2008.

The Chairman of the CBI’s small business Council, Russel Griggs, commented:

“Smaller manufacturers have been pinning their hopes on the relative weakness of sterling to boost overseas order and offset weak demand at home.”

Mr Griggs added that it is very encouraging that exports are now beginning to stabilise.

Additional research from the Chartered Institute of Purchasing and Supply (CIPS) and Markit, shows that UK manufacturing rose to a 15 year high at the start of 2010.

Markit’s senior economist, Rob Dobson, commented:

“December’s PMI data signals a positive end to a tumultuous year for UK manufacturers.”

Mr Dobson went on to say that the survey raises hopes that the slow recovery from the recession, as signalled by the Gross Domestic Product (GDP) data in the final quarter of last year, will have gained momentum as we move into 2010.

In spite of this Mr Dobson also warned that lacklustre spending and a difficult export market were still dragging on the UK’s manufacturing base.