UK: Employers' Optimism Over Exports Reaches the Highest Since 1995, CBI Says
U.K. Export Optimism Reaches the Highest Since 1995, CBI Says
By Jennifer Ryan and Zijing Wu
Jan. 21 (Bloomberg) -- U.K. manufacturers’ optimism on exports rose to the highest since 1995 this month as the weakness of the pound stoked demand for British goods overseas, the Confederation of British Industry said.
A quarterly measure of sentiment rose to 19, the highest since July 1995, from 16 in October, the nation’s biggest business lobby said today. A monthly index of factories’ order books rose to minus 39, the highest since December 2008, from minus 42 the previous month.
The pound has dropped about 17 percent against a basket of trade-weighted currencies since the start of 2008, making U.K. products cheaper to buy abroad. Evidence of strengthening economic growth may aid Prime Minister Gordon Brown, who trails the opposition Conservatives in opinion polls before an election that must happen by June.
“Manufacturers are seeing a return to modest growth, thanks in part to improved overseas demand and much slower stock reductions,” Ian McCafferty, the CBI’s chief economic adviser, said in an e-mailed statement. “It is encouraging that the weaker pound is now providing firms with some respite as global demand improves. However, the manufacturing sector is not out of the woods.”
The CBI’s data is based on a survey of 461 companies questioned from Dec. 10 to Jan. 6.
Filtrona Plc, a U.K. maker of plastic packaging and cigarette filters. said on Jan. 14 provisional revenue rose 2.8 percent from a year ago. Chief Executive Mark Harper said in a statement the company is “well positioned to deliver further growth as demand in its markets recovers.”
The economy contracted 0.2 percent in the third quarter, extending the slump to six quarters. Bank of England Governor Mervyn King said in a speech this week that quarterly growth rates “may soon turn positive” though unemployment is “likely to remain high.”
To contact the reporters on this story: Jennifer Ryan in London at Jryan13@bloomberg.net; Zijing Wu in London at Zwu17@bloomberg.net.
Last Updated: January 21, 2010 06:22 EST
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