UK manufacturing has remained resilient despite uncertainty over Brexit negotiations, the EEF says Reuters

UK manufacturers remain confident of strong growth in 2017 on the back of a surge in export orders in the second quarter, according to a new survey.

Manufacturers' organisation EEF and accountants BDO said British firms reported positive output and new order balances that were well above historical averages during the second quarter of the year.

This was driven by rising overseas demand for British goods, helped by an improving global economy and the weaker pound.

Some 61% of firms saw improved demand from European markets, despite uncertainty over a post-Brexit trade deal between the UK and the European Union.

The EEF made an upward revision of its forecast for factory output growth in 2017 to 1.3% from 1%, while the 2018 forecast was revised up to 0.5% from 0.1%.

"Our survey marks another quarter of positive news about growth prospects for UK manufacturers," EEF chief economist Lee Hopley said.

"While growth and confidence hasn't been knocked off track by the snap election, it is not plain sailing from here. There is the continuing challenge of managing input cost increases; ensuring success in attracting and retaining the skills that are in increasing demand and driving up investment in the sector."

Manufacturers expanded their workforce in the second quarter to meet rising demand. Investment intentions eased back from the first quarter but remained in positive territory.

Tom Lawton, head of BDO manufacturing, said: "The continued growth in world markets such as Asia, North America and Europe are driving positive demand conditions.

"These results show yet again that manufacturing has the resilience and the qualities to form one of the foundations of a successful UK economy."

Despite upgrading its manufacturing forecasts, the EEF kept its GDP growth forecasts unchanged at 1.8% for 2017 and 1.3% for 2018.

Data released by the Office for National Statistics on 25 May showed that the UK's gross domestic product grew just 0.2% in the first three months of 2017, a marked slowdown from the 0.7% expansion in the previous quarter.