Britain's manufacturing industry remains strong, with exports up as UK trade continues to enjoy a boost from a weaker pound and an improving global economy, according to a new survey.

The quarterly survey, compiled by EEF, which represents British manufacturers, and accountancy firm BDO, said Brexit-related uncertainty was presenting "less of a drag than previously expected" with firms reporting positive output and new order balances.

It said "a combination of the weaker exchange rate and enduring healthy demand conditions should see exports continue on the up", putting factory output on track for its fastest growth since 2014.

Demand was especially "buoyant" in European markets, with 61% of firms saying they had seen an increase.

Meanwhile, higher import prices should in theory encourage UK households to move towards domestically produced goods and services and away from imported goods, it said.


As a result of the "positive trends", the EEF revised up its forecasts for factory output for this year and and next year to 1.3% and 0.5% - up from 1% and 0.1% respectively.

The organisation's chief economist Lee Hopley said: "Industry is reporting that output and orders have continued to head higher in recent months and the recovery in manufacturing globally is a big part of the story.

"It's very encouraging that UK manufacturers have positioned themselves to capitalise on the windfall of a competitive pound and resurgent world economy."

However, she called for "a bold industrial strategy" to be "set in stone" by the party which forms the next government, warning: "It is not plain-sailing from here."

In particular, the likely continued squeeze on household incomes and the possibility of no deal on Brexit could damage trade, she warned, while also highlighting rising raw material costs, skills shortages and insufficient investment.

"There is the continuing challenge of managing input cost increases, ensuring success in attracting and retaining the skills that are in increasing demand and driving up investment in the sector," she added.

Tom Lawton, a partner at BDO, added: "It is vital that we remain open for business and negotiate new trade agreements with the EU and other key markets so that international markets remain open and accessible as soon as Brexit is completed."