Manufacturing recovery hopes rise

Is a recover on the horizon for beleaguered manufacturers?

The UK's hard-pressed manufacturing sector has improved once again, underlining hopes of a recovery.

Business leaders said conditions were slowly getting better for the sector, with order books at their highest levels since June last year.

The CBI's total order books balance rose from minus 24 last month to minus 19 in December.

There was also optimism about the future with output expected to grow for the first time in almost a year.

The balance of plus 5 percent compared with minus 2 last month is the best level since October 2002.

Exports improve

The figures underlined hopes that a manufacturing recovery is slowly taking hold.

They echoed last week's figures from the Office of National Statistics which showed factory output grew at the fastest pace since the summer of 2002.

CBI head of economic analysis Doug Godden said: "Manufacturers are still facing a really tough uphill battle with over a third saying order books remain below normal. But the survey suggests conditions are slowly getting better."

Meanwhile, exports orders neared three-year highs, with a reading of minus 21 the highest since January 2001.

However, it was not all good news. The CBI survey also found that stiff levels of competition will continue to depress prices over the next three months.

But, the pace of the falls is expected to be the slowest rate since January 2001.