Activity in the manufacturing sector remained steady in December, and production is expected to continue rising in the next three months, according to the latest CBI Industrial Trends Survey.

Output growth has been broadly steady since August, and remained above average this month.

Amongst the various sectors, growth in Motor Vehicles & Transport Equipment rose to a nine-month high.

The survey of 485 manufacturers found that total order books edged up slightly, remaining strongly above average. Whilst still relatively weak, export order books improved slightly and are at a four-month high.

Rain Newton-Smith, CBI Director of Economics, said:

“The manufacturing sector is ending 2014 on a more upbeat note, having lost a little momentum earlier in the year.

“Export orders have improved, and output is expected to continue growing as we head into the New Year.

“However, the otherwise solid outlook for UK manufacturers is tempered by a challenging global backdrop. With Eurozone growth disappointing and some emerging markets facing a tough time, firms need to look harder for opportunities to ramp up exports to high-growth sectors across the globe.”

Key findings:

Machining (PD)32% of firms said the volume of output over the last three months was up and 19% said it was down, giving a balance of +13%. This was above the historical average (+2%)

Businesses expect output to grow in the coming quarter, with 31% predicting growth, and 15% a decline, giving a balance of +16%

25% of firms reported total order books were above normal, and 19% said they were below normal, giving a rounded balance of +5%. This was well above the long-run average (-16%)

16% of businesses said their export order books were above normal, and 29% said they were below normal, giving a balance of -13%. Whilst still weak, this was above average (-20%)

Output price inflation expectations for the next quarter rose to their highest (+7%) since April 2014 (+9%)

17% of firms said their present stocks of finished goods were more than adequate, and 9% reported they were less than adequate, giving a rounded balance of +9%, below the long-run average (+14%).

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