Cautious optimism for manufacturing sector

The UK’s manufacturing firms are likely to be buoyed by new figures which suggest exports and orders increased during July.

The Confederation of British Industry (CBI) last week published its latest industrial trends survey and the statistics signal that a number of sectors have reported a rise in demand from overseas customers.

But the business body also warned that its output expectations index had fallen to a seven month low.

Rain Newton-Smith, the CBI’s director of economics, said: “While the rebound in manufacturers’ total order books is encouraging, many firms are still struggling.”

He said that it remained to be seen what impact the continuing instability in China’s financial markets will have on the UK.

“With only four per cent of the UK’s exports going to China, the country’s slowdown is not a direct cause of concern for our manufacturers.

“But it will make life harder for our firms in exposed sectors like metals and commodities.”

The latest survey follows the release of data from the Office for National Statistics (ONS) earlier this month. Analysts said that the manufacturing sector had seen a modest 0.2 per cent rise.

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