UK production reached a 20-year high in the second quarter of 2017 and optimism for export orders rose to the highest level since the 1970s. The study of the Confederation of British Industry (CBI) shows that the volume of production has risen sharply in the three months to the end of June. The Confederation’s index reaches its highest level since 1995.
“Factories are positive in their expectations of overall demand in the third quarter, but mostly on demand from abroad, which generates stronger output”, the report said.
The news are good for the UK industry, but mostly because on the low local currency, which boosts the exports. On other side the prospects for the domestic consumer demand remains low.
The export order expectancy index for the next three months is rising to the highest level of 40 years.
The inflationary pressures are falling and this trend is expected to continue. In June, for example, consumer inflation slowed down to 2.6% yoy, compared to 2.9% in May.
As industry generates around 10% of the British economy, the good data from the survey of Confederation of British Industry will likely have a limited impact on GDP. On Wednesday, the first reading of GDP data is expected in the second quarter of the year.