Manufacturers reported a surge in optimism in the three months to January, marking the largest upward swing in sentiment in a single quarter on record, according to the latest CBI quarterly industrial trends survey.
The survey of 300 manufacturing firms reported that business optimism improved significantly in the quarter to January, at the fastest pace since April 2014.
Meanwhile, export sentiment continued to fall, but was noticeably less gloomy compared to last quarter.
“Manufacturers are entering the new year with a spring in their step,” said Anna Leach, CBI deputy chief economist.
“Firms are now planning to invest more in plants and machinery, which will ultimately help increase capacity and output.
“However, this boost to sentiment belies poor trading conditions over the past quarter, with output and orders still declining.
“If we are to build on this rebound in optimism among UK manufacturers, it is crucial for the UK and EU to establish a trade deal that supports growth in this sector.”