Latest data reveals those working in the Manufacturing Industry are the most optimistic they have been about hopes for an economic boost than since April 1973.
The news comes as the UK’s lockdown measures relating to the COVID-19 pandemic begin to lift – with the hopes that all limits on social contact will be gone by the summer.
The CBI Industrial Trends survey examines business optimism for each quarter and, this time, logged a score of +38.
Comparing this result with January’s, we see a huge step up. The earlier month score, in the height of the UK’s third and longest lockdown, the index for optimism was -22.
It’s expected that the jump comes from businesses anticipating a ‘surge in output and new orders’ in the coming quarter.
Rain Newton-Smith, CBI chief economist, said: “Manufacturers have reported the biggest increase in optimism in nearly 50 years in this month’s quarterly survey. Phased reopening has lifted the mood among firms, notably driving orders, employment, and investment plans.
“However, rising costs are an increasing concern for many businesses, and seem to be putting upward pressure on prices as firms try to protect their margins.
“Continuing to support firms while they get on a steadier footing as restrictions ease will be crucial to recovery. The Government should continue to work closely with business to ensure reopening is a success, while boosting competitiveness over the long-term.”
Alongside the uptick for business positivity, the data also uncovered firms plans to increase their spending in the next few months – most likely encouraged by the Government’s budget announcement which revealed a ‘super-deduction’ on tax for machinery and other equipment.
The last time investment intentions for machinery and plant equipment were so high, according to the CBI, was in July 1997.
Tom Crotty, group director at Ineos and chair of the CBI Manufacturing Council, said: “It’s hugely welcome to see manufacturers planning to invest more in their businesses following what has been an extraordinarily difficult period for the sector.
“After all, a more productive manufacturing sector can be an engine for the UK’s economic renewal and long-term growth.”