Britain's manufacturers have seen export orders reach a two-year high thanks to the plunge in the value of the pound following the Brexit vote, a report has said.
The CBI Industrial Trends Survey said export orders reached their highest since August 2014, hitting minus 6 this month, up from minus 22 in July.
Total orders came in above expectations, dropping to minus 5 in August, down from minus 4 in July, but above economists' predictions of a fall of minus 10.
The report said the slide in sterling appeared to be fuelling stronger overseas demand, with chemical manufacturers accounting for more than half of the rise in orders.
However, it added price expectations for three months ahead rose to its highest level since February 2015, triggered in part by the rising cost of raw material following the fall in the UK currency.
The results of the report have been echoed by Ben Stocks, group chief executive at Porvair, who said the pound's weakness was proving to be a ‘double-edged sword.’
Porvair is headquartered in Kings Lynn with manufacturing facilities in Fareham, Wrexham and Southampton and saw revenue rise by 13% to £52.1m during the six months to 31 May.
Stocks said: “As a manufacturer of aerospace components and industrial filtration products, the weakening of the pound will definitely help us as an exporter.
“Currently we export around 80% of our goods, with the USA making up approximately 50% of this, followed by Southeast Asia and Europe.
“It will provide a benefit when entering into pricing discussions, however we tend to work on longer lead times – jobs might last several years – so prices change slowly and pricing discussions can be infrequent.
“The flipside is that buying assets or raw materials from overseas becomes more expensive.
“So far our order book has remained the same since the Brexit vote, we had a strong pipeline of work beforehand and we continue to do so. This is always subject to change of course; we’ll see what happens.”
The survey by the CBI of 505 firms also found that average price increases in the three months to November hit plus 8 in August, up from plus 5 in July.
It said manufacturers producing coke and petroleum had the highest expectation of output price inflation for the next three months, while printers and publishers are expecting prices to fall the most.
It added that the measure of output expectations for the three months ahead was plus 11 in August, rising from plus 6 the month before.
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