GROWTH in manufacturing has eased back to more moderate levels, but firms remain confident about the economic outlook, a study has said.

An EEF survey of nearly 300 companies revealed a continued positive picture with ongoing plans to invest in machinery and recruit skilled employees.

Investment intentions have now been positive for 17 consecutive quarters, said the manufacturers' group.

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The EEF also issued a warning about exports because of the flagging eurozone economy and stronger sterling exchange rate.

Lee Hopley, EEF chief economist, said: "Manufacturers are still on course for a strong year of output growth in 2014, but our survey points to a moderation in the pace of expansion from the take-off seen in activity over the past year.

"We're also seeing manufacturers continue to recruit for skilled jobs and increase their plans to invest in the coming year, exactly what the UK economy still needs for balanced growth."