Britain’s manufacturers are undergoing a substantial recovery as exports and domestic orders surge, raising hopes that the industry will support the wider economy.
The weak pound should support exports but official data has shown little sign of this effect, the Telegraph reports.
However the British Chambers of Commerce’s quarterly survey of its members now shows burgeoning growth in manufacturing exports.
The services sector, which accounts for most of the economy, is performing more steadily, however.
The positive figures come against a backdrop of slowing economic growth and the BCC’s director general urged the Chancellor to find ways to boost the UK’s long-term potential in his Budget next month.
“The Chancellor’s Autumn Budget is a critical opportunity to demonstrate that the Government stands ready to incentivise investment and support growth here at home,” said Adam Marshall.
“A failure to act, or a conscious choice to provide a short-term sugar hit to the electorate rather than the protein boost the economy needs, would have significant consequences for the UK’s medium-term growth prospects.
“Now is the time to take bold action, and create the conditions to help the economy rebound from a period of anaemic growth. Government must demonstrate competence, coherence, and above all a clear plan to support the economy through a period of change.”
A net balance of 24 per cent of manufacturers said their domestic sales were rising, the strongest level since the start of 2015.
Export sales also picked up with a net balance of 29 per cent reporting growth.
The services sector’s domestic sales grew more modestly with a net balance of 19 per cent – holding steady on the quarter – while export sales had a net balance of 14 per cent.
Companies are increasingly keen to hire, indicating a desire to expand further.
In the manufacturing sector 71 per cent of companies are trying to take on more staff, up from 65 per cent in the previous quarter.
Among services firms the proportion has risen from 49 per cent to 52 per cent.
Unemployment is at a 42-year low and companies are finding it difficult to fill their vacancies – 74 per cent of manufacturers and 67 per cent in the services sector report rising recruitment difficulties.
Both sectors have strong and steady profitability and turnover forecasts for the next 12 months, indicating their belief that growth is resilient even if GDP has been sluggish in recent months.