Orders into U.K. manufacturers surged in March, to their highest level in 12 years.
The Confederation of British Industry said Thursday that eight percent of firms' current total order books were “above normal,” exceeding last month’s 12-year record and the strongest balance since May 1995.
The last two months saw total order book levels well-above normal for the first time in 12 years and both balances are higher than the survey's long-term average, the CBI said.
All sectors saw rising demand, with capital goods making the biggest contribution. The level of export order books was still regarded as normal.
The CBI said factory output expectations fell slightly from last month’s 12-year high - to 21 percent from 28 percent. In all sectors, expectations for output dropped slightly, with intermediate goods such as timber, chemicals and man-made fibers now showing a stronger balance than either capital or consumer products.
Meanwhile, the highest number of manufacturers since March 1995 expect to raise prices, with this month’s figure of 21 percent slightly higher than the preceding two months’ 19 percent.
"The revival in the fortunes of UK manufacturing shows no signs of abating yet, with domestic demand driving growth," said Ian McCafferty, the CBI's Chief Economic Adviser. "Better trading conditions mean more firms feel they can pass on price rises. With many - particularly smaller to medium manufacturers - still locked into last year’s high-cost energy contracts, the pressure to repair profit margins remains strong."