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LONDON, March 21 (Reuters) - - Optimism among British factories surged to a 22-year high in March as exports rebounded, a survey showed on Tuesday, adding to signs manufacturing has benefited from sterling's fall after the Brexit vote.
The Confederation of British Industry's monthly balance of output expectations in the coming three months rose to +36 from +33 in February, its highest level since February 1995.
The survey also showed export orders growing at the fastest pace since December 2013. However, the total order book balance held steady at +8 in March, which may suggest a slightly weaker influx of domestic orders given the large improvement in exports.
"The past fall in the pound seems finally to be helping lift demand for UK manufactured exports, which rose at one of the fastest paces in this survey's history," said Anna Leach, CBI head of economic intelligence.
Official data earlier this month showed British factories enjoyed their strongest growth in nearly seven years in late 2016 and early 2017 and exports rose quickly, likewise suggesting a boost for manufacturers from sterling's fall after the Brexit vote.
But sharply rising inflation has been one side-effect from the pound's plunge.
"(Cost) pressures are widespread, and manufacturers expect factory-gate prices to continue to rise strongly over the next three months. And this will also put pressure on prices generally."
Data earlier on Tuesday showed British factory gate prices rose 3.7 percent in February, the biggest increase since December 2011.
Reporting by Andy Bruce, editing by Alistair Smout