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Car-makers help fuel economy as IMF upgrades growth forecast: Factory and mortgage figures boost confidence But export orders fell in January survey, says CBI

January 22, 2014

Angela Monaghan and Katie Allen

A survey revealing a jump in new orders at Britain's factories and figures showing booming mortgage lending were the latest signs of UK economic recovery, as the International Monetary Fund confirmed it had upgraded its UK growth forecast. New manufacturing orders grew at the strongest rate in almost three years in the three months to January, the CBI said; 34% of manufacturers reported an increase in new orders over the period, while 21% reported a fall, the business group reported in its latest industrial trends survey. The subsequent balance of +13% was the highest since April 2011 . A pick-up in the broader economy, with growth of 0.8% in both the second and third quarters of 2013, has helped to boost confidence among consumers and businesses in recent months. Yesterday the IMF confirmed it had upgraded its UK growth forecast to 2.4% for this year, from a previous forecast of 1.9%. David Cameron took to Twitter to say the IMF upgrade was "an encouraging sign of more jobs and security". A report published by PwC to mark the start of the World Economic Forum in Davos said UK business leaders are among the most upbeat in the world, with 93% of chief executives confident about prospects for their company in the year ahead. A strengthening housing market has helped to underpin rising optimism about the UK's prospects, with house prices rising 8.4% in 2013, according to the Nationwide. Mortgage lending increased by 23.8% in 2013 to pounds 177bn, according to figures published yesterday by the Council of Mortgage Lenders . Lending in December was pounds 17bn, the same as November but the highest December total since 2007. Britain's car industry has been another bright spot for the economy, with new car sales up 10.8% in 2013 and figures published tomorrow expected to show an increase in UK car manufacturing last year. The industry has been hailed by the government as a success story for British manufacturing, as companies including Jaguar Land Rover and Nissan continue to invest in the UK . Nissan , the UK's largest car manufacturer, has started production of the new Qashqai at its Sunderland factory, where more than 7,000 people are now employed. The Japanese company, which has operated in Sunderland for 28 years, has invested pounds 534m in the UK development and production of the Qashqai, which supports 224 suppliers in 22 countries. The vast majority - 81% - of cars made by Nissan in the UK are exported to more than 132 markets, but UK exports overall have failed to take off as much as policymakers hoped in recent years. The CBI's January industrial trends survey showed that although orders rose over the three-month period, the picture was less positive for January's survey alone. The new orders balance fell unexpectedly to -2% from +12% in December, and there was an even sharper drop in export orders, with a balance of -16%. The government outlined a target in 2012 of doubling British exports to pounds 1tn by 2020. Business secretary Vince Cable insisted last week the ambition was still achievable, despite the annual value of UK exports remaining flat over the last two years. Trade minister Lord Livingston announced yesterday that every mid-sized business in the UK will be offered tailored trade advice to help them break into new markets. He will write to 8,900 business by this summer, following a report from the Commons public accounts committee last week that said the government was not doing enough to help companies. 34% The percentage of manufacturing firms reporting an increase in new orders in the three months to January, says the CBI Captions: Nissan has started producing its new Qashqai in Sunderland , as the car industry continues to be a bright spot in the UK economy Photograph: Richard Rayner /NNP

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Source: Guardian (UK)

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