LONDON (Reuters) - British factory orders weakened slightly more than expected in March, but firms still expected to increase output strongly in the coming months, the CBI’s monthly Industrial Trends survey showed on Tuesday.
The Confederation of British Industry survey’s total order book balance fell to -8 this month from -3 in February, below expectations of a reading of -6.
However, that was still above the survey’s long-run average of -17, and the CBI said it showed the sector’s recovery was continuing to gather pace.
The survey showed firms expected to raise output at its fastest pace in a year in the next three months, with the output expectations balance rising to +24 from +15.
“Firms again expect a strong rise in output over the next three months on the back of above-average order books,” said CBI chief economic advisor Ian McCafferty.
Firms also plan to raise their prices in the coming months, with the price expectation balance rising to +24 from +10, its highest since June 2011. The CBI said this reflected the recent rise in oil prices.
“Any further rise in oil prices would be a significant concern, given the additional cost burden this would place on UK manufacturers and the knock-on effects it could have on the nation’s recovery,” McCafferty said.
Reporting by Olesya Dmitracova, writing by Fiona Shaikh