British factory orders staged a modest rebound in February as expectations for output in the next three months hit their highest level since September, a survey showed on Thursday.
The Confederation of British Industry’s monthly industrial trends order book balance rose to +3 in February from -2 in January – well above the long-run average of -17, although that was slightly short of the +5 expected by economists in a Reuters poll.
The CBI said 16 out of 17 manufacturing sectors in the survey expect output to increase over the next three months.
“The survey indicates overall that the manufacturing sector is performing pretty well in the first quarter of 2013, but has come modestly off the peak levels seen in late-2013,” said Howard Archer, chief UK and European economist at IHS Global Insight.
The survey’s measure of the volume of output for the next three months rose to +28 from +23, reaching a five-month high.
Output price expectations slipped back from January, although they still indicated significantly above-average inflation.
“With the price expectations balance falling just 3 points to +17, the survey indicated that producer price inflation could be set to rise,” said Jack Allen and Samuel Tombs, analysts from Capital Economics, in a note to clients.
“But with a large amount of spare capacity remaining in the sector and input price inflation weakening since last July, it seems unlikely that manufacturers will be able to push through significant price rises in the near term.”