UK factories have enjoyed a record surge in activity as Britain’s economic revival ramps up but are set to hike prices at the fastest pace in nearly 40 years, according to a survey.
The CBI’s latest poll of 304 manufacturers revealed that output grew at the fastest pace since survey records began in 1975 in the three months to June and is expected to continue at a fast clip in the next quarter.
The balance of firms reporting higher output volumes surged to +37 this month, with around 52% seeing an increase and just 16% a decrease.
Order books were also the healthiest seen in the sector for a decades, with total orders reaching their strongest out-turn since 1988 and exports at their highest for over two years.
But factories warned they expect to hike their own prices in the next few months at the fastest pace since 1982 as inflationary pressures grow.
The report showed 48% of firms surveyed expected to increase output prices over the next three months, with just 2% forecasting a cut, giving a balance of +46.
Manufacturers also reported supply shortages with stock adequacy at its weakest since records began in 1977.
Tom Crotty, group director at Ineos and chairman of the CBI manufacturing council, said it was “hugely reassuring” to see growth rebounding to record levels in the sector.
But he said firms were facing “difficulties”, with staff shortages on top of supply and pricing woes.
“It will be critical for the Government to continue to work with manufacturers to address these issues if the sector’s robust performance is to last over the long-term,” he said.