Output from Britain’s factories has risen over the past three months, with buyers at home and overseas ordering more goods made in the UK.
The level of jobs in factories is tearing away, with a rapid rise in employment set to continue well into 2018, and managers keener to invest in machinery, according to the CBI industrial trends survey of 369 manufacturers.
Bosses are now worried about skills shortages – many pointing to skilled labour supply as the main cap on output this year. Most firms at running at full capacity to fulfil orders.
Prices will also increase, as imports and domestic inflation push unit cost level growth, which will also put pressure on wages for employees when their pay packets buy less at the shops.
Rain Newton-Smith, CBI Chief Economist, said: “It’s good to see manufacturing going from strength-to-strength with growth up and the buoyant global economy boosting export orders. But the past depreciation in sterling continues to leave its mark on firms’ costs and margins. With expectations for factory gate price inflation at their highest in 30 years, the pressure on consumer prices looks set to persist.
“Capacity pressures are ramping up and skill shortages are a big concern, underlining the importance of establishing a future immigration system that provides companies with access to talent and labour. The building blocks of a new system that meets economic needs and public concerns must start with scrapping the net migration target, which has never been fit-for-purpose.”