Export orders soar thanks to weak pound

Manufacturing exports have moved into positive territory for the first time since March 2008 as the sector continues to lead Britain's nascent economic recovery.

The balance between companies reporting export orders above and below normal stood at plus 3 per cent last month, the latest figures from the Confederation of British Industry said yesterday.

The balance is a massive jump from the minus 16 per cent in March and enough for a 17 per cent balance of respondents to be expecting output to rise over the coming quarter.

Total order books also surged to a 21-month high, although they are still at minus 18 per cent.

A strong rebound in manufacturing is already having a significant impact on Britain's economic performance. Output bounced by 2.3 per cent in March, the biggest monthly rise since July 2002 and enough to raise expectations that the Office of National Statistics will revise up its first quarter GDP estimate from 0.2 to 0.3 per cent growth later this month.

Sceptics claim the boost may prove illusory, as post-recession re-stocking tapers off and austerity measures in the debt-wracked eurozone push down economic growth.

But the weak pound will continue to be a major boost. "The depreciation of sterling is a once-in-a-decade opportunity for exports, and it is unlikely to reverse in the short term given the structural weaknesses in the economy," Graeme Allinson, the head of manufacturing at Barclays Corporate said. "We are in for a sustained period of sterling weakness, while demand is picking up – albeit slowly and with challenges in the eurozone markets."

March also saw a continued rise in house-buying activity, with mortgage lending up by 45 per cent year on year, according to the Council of Mortgage Lenders. In a ninth consecutive month of growth, March saw 45,000 loans for house purchases agreed, up 25 per cent in volume and 24 per cent in value compared with February.