AN improving picture for exports – after seven quarters of decline – has been reported by smaller manufacturers.
But a survey by employers’ body the CBI warned that factory output was expected to fall in the second quarter of 2010 as overall demand remains weak.
Export volumes rose for 27% of the 418 firms polled during the three months to January and fell for 25%.
The resulting balance of plus 2% is the strongest figure since January, 2008, which stood at plus 12%.
A balance of plus 8% expect export sales to grow more strongly in the next quarter while a balance of plus 15% are optimistic about export prospects for the year ahead.
Home orders continued to decline – but at a slower rate. Some 23% of firms reported a rise in orders during the past three months against 33% noting a fall – giving a balance of minus 10%. A balance of minus 7% expert domestic orders to fall in the next quarter.
Some 27% of small and medium-sized firms said output rose and 26% said it fell. The resulting balance of plus 1%, was better than expected and the highest since April, 2008. But output is expected to weaken in the coming months.
Andrew Palmer, CBI regional director for Yorkshire, said: “Smaller manufacturers have been pinning their hopes on the relative weakness of sterling to boost overseas orders and offset weak home demand.
“It is encouraging that exports are now stabilising.
“Small and medium-sized manufacturers are also expecting overseas orders to grow in the coming months and are the most upbeat about export prospects for 15 years.
“However, with the economy only just edging out of recession, conditions will still feel pretty challenging for smaller firms.
“Domestic orders are likely to remain depressed and firms are expecting output to fall in the next three months”.
