For the first quarter of 2015, the CBI Quarterly Industrial Trends Survey shows the recovery in British manufacturing is continuing, although at a slower pace.

The survey of 468 firms reported a slowing since the January results, but remaining well above average. Domestic orders rose slightly, but exports growth remained slow: output growth fell to its lowest level since 2013, but remains above the average.

Firms reported stronger expectations for second quarter, with output and order growth expected to firm up and predictions for exports growth were at their strongest for nine months. The number of firms highlighting orders or sales as a possible constraint to activity has also risen.

Looking forwards, investment intentions have declined across all categories, although remaining or above their long-run averages.

CBI comment:

Katja Hall, CBI Deputy Director-General, said “It’s encouraging that our manufacturers are seeing – and expect to see – continued growth, with rates of expansion still above average.

Exports keep dragging at the heels of growth: firms are finding the recent rise in the Pound against the Euro challenging, making them less competitive in Europe, while the unravelling situation in Greece is creating uncertainty.

Among the measures business wants in the first 100 days of a new government, an ambitious, long-term export strategy must be a central element to keep growth on course.”

Key findings

– 37% of businesses reported an increase in total new order books

– The sluggish balance for export orders (+4%) remained unchanged from January’s quarterly survey

– 23% of manufacturers said employment numbers were up, and 18% said they were down

– 22% of firms reported a rise in output volumes, and 17% a decrease

– Manufacturers’ investment intentions compared to the previous twelve months deteriorated for buildings (to -19%, from -5%), plant and machinery (to -6%, from +16%), product and process innovation (to +18%, from +27%) and training and retraining (to +25%, from +32%)

– Manufacturers believe their competitiveness in the EU has worsened (-30%) to its lowest

Go here for the full report from the CBI