"The manufacturing sector has increasing confidence in the UK's recovery with optimism about the general business situation improving to the greatest extent since April 2010"
- Stephen Gifford, CBI Director of Economics
A day after British policymakers said there is no need in additional stimulus measures as economy is building up steam, the latest CBI quarterly Industrial Trends Survey showed optimism among U.K. manufacturers advanced at the fastest rate since April 2010, on the back of strong demand for goods and increased output. The survey showed that the number of new orders rose for the second straight quarter, while output advanced for the third quarter in a row. Improved economic situation in the U.K. has led to a stronger domestic demand, while a pickup in the global economy pushed exports higher. Amid all these factors the overall sentiment is constantly improving. After returning to growth, the U.K. has become one of the fastest growing economies in the world, and even high inflationary pressure is not weighing on businesses. The investment intentions, however, still present mixed picture, as plans for spending on machinery and plant fell over the corresponding period. Another worrying sing is the fact that total orders books balance unexpectedly plunged to -4 from 9 in September.
Despite mixed signals sent by the reports from CBI, a welcoming sing comes from the labour market as after decades of moving production abroad, companies are finally starting to create more jobs within the U.K. Companies are expected to create extra 200,000 jobs, with a consequential 20 billion pounds reduction in the trade deficit over the next ten years.
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