Manufacturing exports have benefited significantly from the weakness of the pound, according to the latest data by the Confederation of British Industry (CBI).
The industrial trends survey has revealed that exports grew by their fastest pace in over two and a half years in the three months up to October. The data showed around 29 percent of firms polled reported an increase in total orders, with 20 percent reporting a decrease. One in five companies said they were more optimistic about the business situation than three months ago, but 28 percent were less so.
“Manufacturers are optimistic about export prospects and export orders are growing, following the fall in sterling,” commented Rain Newton-Smith, CBI’s chief economist.
“However, the weaker pound is also feeding through to costs, which are rising briskly and may well spill over into higher consumer prices in the months ahead.
“Access to skills clearly remains a high priority, so manufacturers will be looking to the government to implement a new migration system that meets the needs of business while responding to clearly-stated public concerns.
“Maintaining a preferential route between the UK and the EU, our largest trading partner, will be important,” she stated.
Additionally, the CBI warned that the pound’s weakness was “a mixed blessing”, and its devaluation had resulted in the fastest rise for price of average units in over three years.
Moreover, 47 percent of those surveyed said the depreciation of the pound had impacted their business negatively, while 32 percent said deemed the impact to have been a positive development.
The CBI stated that companies will be largely focused on the Chancellor’s November Autumn Statement for further clarification on the Goverment’s intended industrial strategy.
“Ultimately, all businesses need greater clarity from the Government on the fundamental issues of skills and barrier-free access to EU markets as soon as possible,” added Ms Newton-Smith.