Orders pour in despite cost pressures

The UK’s small and medium-sized manufacturers saw the volume of orders at home and abroad grow at the fastest rate in 16 years, leading to another solid rise in output.

But the CBI warned that smaller firms are being squeezed by intense cost pressures.

The CBI’s latest quarterly SME Trends Survey revealed that volumes of domestic and export orders among smaller firms rose at the fastest rate since April 1995.

Of the 414 respondents, 39 per cent reported a rise in the volume of domestic orders in the three months to April, and 23 per cent a fall.

Strong demand at home and abroad, coupled with stock rebuilding, helped push up output further.

But alongside strong growth, production costs have increased rapidly, weighing on profit margins.