THE UK's manufacturing sector experienced strong trading in May, a report has revealed.

The CBI's Industrial Trends survey says 36 per cent of firms saw output rise in the last three months.

It said 21 per cent of companies reported a drop in activity, giving a balance of plus 15 per cent for the third consecutive month.

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That figure is much higher than the average of plus two per cent.

It added 22 per cent of firms' order books were above normal, with 19 per cent reporting exports higher than average.

The results came as figures showed the sector, which remains well below its pre-recession level, grew by 1.4 per cent in the first quarter of the year.

Manufacturing growth is seen as key to re-balancing the recovery, which has been dominated by domestic consumer spending.

Katja Hall, CBI deputy director-general, said: "The manufacturing sector continues to perform well.

"Output growth is on an upward trend, with firms expecting an even stronger rise in the next three months.

“Inflationary pressures are under control, with firms now expecting only a slight rise in the selling prices of their goods."

However, she warned the increase in the pound could weight on export demand.

She added: "The recent rise in sterling, coupled with a tepid recovery in the Eurozone, could weigh on export demand.

"As the UK’s economic recovery gains a firmer footing, we need to ramp up manufacturing exports to high-growth markets, driving job creation in the UK.”

Last month, the CBI warned UK economic growth remained strong, despite slowing down.

It said the outlook is bright, with growth expected to accelerate through the strength of the service sector.