Slowing exports drag on manufacturing growth

And, looking ahead, the UK's biggest industrial organisation is predicting further subdued growth for the wider economy, after a 'tepid' 2017.

Despite this, the latest industrial trends survey from the Confederation of British Industry found manufacturing output has continued to grow at a "healthy pace", with a balance of 24% of firms reporting an increase for the quarter to February, up from 21% in January.

The CBI said total order books weakened across the sector, with a balance of 10% of firms reporting an increase in the three months to February – with 30% reporting order books above normal and 20% reporting them below normal – down from 14% in January, but still above the long-run averages.

Export order growth eased back significantly, with a balance of 10% against 19% in January.

Overall manufacturing output growth is also expected to moderate in the three months to May, but remain well above average, the CBI survey found.

Both manufacturing and export order books remain well above their long run averages, despite weakening somewhat.

Growth was broad-based, predominantly driven by food, drink and tobacco, and motor vehicle and transport equipment sub-sectors. But that will slow a little over the next three months.

The CBI said demand in the manufacturing sector should continue to be buoyed by the lower pound and buoyant global economy. But it expectsconsumer-facing companies and retailers to continue to struggle while consumer incomes remain under pressure from higher inflation.

Anna Leach, CBI head of economic intelligence, said: “This month saw another strong showing from UK manufacturers. Although order books weren’t quite as buoyant as they were last month, demand remains strong and output grew briskly.

“With the Brexit negotiations reaching a critical juncture, many businesses are concerned about future barriers to trade and are looking for clarity over the future relationship with the EU. Remaining in a comprehensive customs union will help alleviate some of those fears and give firms the confidence to invest and grow.”

Tom Crotty, group director of Ineos and chairman of the CBI Manufacturing Council, added: “Manufacturers are benefitting from the health of the global market place. But companies still struggle to find the workers they need to grow their business. To ensure there’s a strong pipeline of people with the technical skills needed, we need young people to receive further education and careers advice built upon the needs of employers.”