LONDON (Reuters) - British factories expect further strong growth over the next three months after a pick-up in orders, though consumers are likely to feel greater pressure from higher prices, an industry survey showed on Tuesday.
The Confederation of British Industry said its monthly industrial order book balance rose to +13 this month from +10 in July, beating economists’ expectations in a Reuters poll for it to edge slightly lower and well above its long-run average.
Expectations for the volume of output over the next three months were the highest since March - showing manufacturers expect similar growth to the previous three months - while pricing expectations firmed after a dip in July.
“There are further signs that exporters are feeling the benefit from the lower pound in this month’s figures, and output growth is expected to power on over the coming quarter,” CBI economist Anna Leach said.
Inflation was likely to rise to around 3 percent later this year and fall little next year, she added, as manufacturers continued to pass on the effect of sterling’s fall after the June 2016 vote to leave the European Union.
The upbeat message from the CBI on growth echoes that found in other business surveys, but contrasts with official data, which showed manufacturing output contracted by 0.6 percent in the three months to June, reflecting weaker car production.
The CBI survey was based on responses from 432 manufacturers collected between July 26 and Aug. 11.
Reporting by David Milliken, editing by Andy Bruce