Roundup: British manufacturers see 29-year high in orders

LONDON, Dec. 18 (Xinhua) -- Manufacturing order books recorded a 29-year high in the three months to December, according to the latest Confederation of British Industry (CBI) industrial trends survey published on Monday.

A total of 28 percent of manufacturers reported order books to be above normal, and 11 percent said they were below normal, giving a balance of 17 percent, the joint highest with last month and August 1988.

Orders were robust across the board, with the motor vehicles and transport equipment, and mechanical engineering sectors especially strong.

However, the survey showed expectations of output growth moderating over the next quarter.

Manufacturers expect output prices to rise at the fastest rate since June in the quarter ahead, while stock adequacy deteriorated to below its long-run average.

The slide in the pound on the back of the Brexit vote and the global upturn in growth means manufacturing firms are benefiting from that, Andrew Wishart, British economist with Capital Economics, a London-based financial data analysis firm, told Xinhua on Monday.

The sterling fell sharply in the immediate aftermath of the June 23 Brexit referendum vote last year, falling from 1.48 U.S. dollars to 1.22 U.S. dollars and now trades at 1.34 U.S. dollars.

The devaluation has increased costs of raw materials, imports and also costs of supply chains for businesses, but the sterling devaluation has provided a boost to exporters.

"Total orders the balance of firms reporting orders higher than normal is the highest since 1988, that is extremely strong," said Wishart. "The flipside is that the output expectations remained unchanged at 13, which is consistent with a significant slowdown in manufacturing output growth."

That could reflect that firms have struggled to meet all their orders due to capacity constraints, said Wishart. However, he was optimistic that the manufacturing sector will continue to perform strongly in Q4 and throughout next year.

"Certainly other evidence, such as the Purchasing Manager's Index (PMI) for November showed extremely strong readings, indicating firms are not yet running into those capacity constraints and we hope to see some more investment from manufacturing firms if demand keeps up," said Wishart. Enditem