Britain's manufacturing sector received a much-needed boost in August, as exports rose to a two-year high, according to the latest monthly industrial trends survey by the Confederation of British Industry (CBI).
According to the survey of 505 firms, the headline total orders balance declined from -4 in July to -5 in August, although that remained above the consensus expectation of a decline to -10 and above its long-run average of -20.
"It's good to see manufacturing output growth coming in stronger than expected, and some signs that the fall in sterling is helping to bolster export orders," said Anna Leach, CBI Head of Economic Analysis and surveys.
"But the pound's weakness is a double-edged sword, as it benefits exporters but also pushes up costs and prices."
The report also found exports picked up at the fastest rate since August 2014 suggesting that the depreciation of sterling since the end of last year may be feeding through to stronger overseas demand.
Firms indicated they expect the weaker pound to have an impact on prices, with the price expectations balance rising from +5 to +8, its highest level since February 2015.
More importantly, the forward-looking output expectations balance rose from +6 to +11, offering more reasons to economists to remain mildly optimistic about the state of the UK economy in the aftermath of the pro-Brexit vote.
"While it is still early days, the latest survey is another reason to think that the economy should avoid a deep recession," said Paul Hollingsworth, UK economist at Capital Economics.