Optimism among UK manufacturing firms has improved at its fastest rate for 48 years as the easing of coronavirus restrictions sparked further hopes about the country’s economic recovery, according to new figures.
The Confederation of British Industry (CBI) said its latest quarterly Industrial Trends Survey for the three months to April showed a rebound in investment and hiring plans despite the continued impact of the pandemic.
The survey of 288 manufacturers found a 38% jump in its reading for business sentiment, representing the greatest uptick since April 1973.
It said export sentiment also jumped, reporting its strongest improvement in three years.
Meanwhile, manufacturing output was broadly flat for the quarter, despite a rise in new orders.
Cost pressures continue to weigh on the outlook of manufacturers, with firms reporting that costs increased during the period at their fastest pace for around 10 years.
Companies said they expect that costs will continue to jump at a similar rate in the next quarter.
Rain Newton-Smith, chief economist at the CBI, said: “Manufacturers have reported the biggest increase in optimism in nearly 50 years in this month’s quarterly survey.
“Phased reopening has lifted the mood among firms, notably driving orders, employment, and investment plans.
“However, rising costs are an increasing concern for many businesses, and seem to be putting upward pressure on prices as firms try to protect their margins.
“Continuing to support firms while they get on a steadier footing as restrictions ease will be crucial to recovery.”
Tom Crotty, group director at INEOS and chair of the CBI manufacturing council, said: “It’s hugely welcome to see manufacturers planning to invest more in their businesses following what has been an extraordinarily difficult period for the sector.
“After all, a more productive manufacturing sector can be an engine for the UK’s economic renewal and long-term growth.”
Howard Archer, chief economic adviser to the EY Item Club, said: “The CBI Industrial Trends Survey for April was pretty healthy overall, and generally supported belief that the economy has started off the second quarter on the front foot as it benefits from the easing of restrictions.”