LONDON, April 24 British factories are seeing
their strongest export orders in more than six years, helped by
the fall in the value of sterling after last year's Brexit vote,
but they are also scaling back on investment plans, a survey
showed on Monday.
The Confederation of British Industry's quarterly measure of
manufacturing showed the biggest increase on record in the
competitiveness of UK producers in non-European Union markets.
However, the weak pound was pushing up prices and unit costs
rose at their strongest rate in six years.
The CBI also said companies reported their weakest plans for
investment in plant and machinery since mid-2011, when Britain's
economy was still struggling with the hangover from the global
The world's fifth-biggest economy looks set to slow this
year as high inflation eats into the spending power of
consumers. Furthermore, companies are expected to hold back on
investment while the country's future relationship with the EU
is negotiated over the next two years.
But some of the hit is likely to be softened by stronger
exports which are being helped by the weaker pound and a pick-up
in the global economy.
The CBI said domestic orders were buoyant too, rising at
their fastest pace in nearly three years in the three months to
"UK manufacturers are enjoying strong growth in demand from
customers in the UK and overseas, and continue to ramp up
production," Rain Newton-Smith, the CBI's chief economist, said.
"Exports have surged and firms are at their most optimistic
about selling overseas in over four decades. Even so, the
combination of the weak pound and recovering commodity prices
means that cost pressures continue to build, and manufacturers
report no sign of them abating over the near-term."
The CBI's monthly balance of manufacturing output eased back
to +4 in April from +8 in March and expectations for the next
three months also slipped to +16 from +36.
The CBI said its quarterly survey was conducted before
British Prime Minister Theresa May announced her plan for a
national election on June 8.
(Writing by William Schomberg, editing by Andy Bruce)