UK manufacturing remains in recovery despite price pressures remaining "intense", the CBI has said.
Responding to the latest monthly Industrial Trades Survey, 26% of manufacturers said total orders were above normal, while 21% said they were below. The resulting balance of +5% is the highest since March 2008.
However, export order books weakened slightly, with 29% of firms reporting levels above normal, and 24% below. The balance of +5% is down on last month but remains strong by historical comparison.
In line with improving demand, manufacturers' expectations for output growth have strengthened further in March, with 38% of firms predicting an increase over the next three months, and 11% forecasting a fall. The resulting balance of +27% is the strongest since February 2007.
Inflationary pressures remain intense for UK manufacturers, reflecting strong cost rises in oil and other commodity prices, said the CBI. A balance of +33% of firms predict they will have to raise output prices over the coming quarter.
CBI chief economic adviser Ian McCafferty said: "The manufacturing recovery is picking up pace, with firms predicting robust output growth over the next quarter. Total order books have strengthened further this month, and were above normal for the first time in three years, as a firming of domestic demands adds to the healthy export outlook.
"However inflationary pressures in the manufacturing sector remain very acute, as firms look to pass on sharply increased raw material costs. Price expectations for the coming quarter now broadly match their last peak in summer 2008."
In his
Budget announcement to Parliament last week Chancellor George Osbourne said manufacturing in Britain is growing at a "record rate", and is "crucial to the rebalancing of our economy".
The Government is set to fund 21 new Enterprise Zones across the UK in areas where there is a strong focus on manufacturing. Businesses in these areas will get up to 100% discount on rates, new superfast broadband and the potential to use enhanced capital allowances.