MANUFACTURERS were in their most upbeat mood for more than a year this month despite a slight dip in export orders, a survey showed.

The CBI found that the highest proportion of firms since February last year expected to increase output in the coming three months.

The optimism came despite a fall in exports this month, although the level of total orders for UK manufacturers was unchanged. This compares with last month when export orders rose to their highest level for a decade.

The survey also showed that more firms expect to raise their prices in the coming months.

But the CBI said margins remained under pressure from continued increases in input costs, such as metals and crude oil, which so far this year have risen by 68 per cent and 30 per cent respectively.

Sarah Green, regional director of the CBI in the North-East, said: "The outlook for manufacturing is positive in the short-term, driven by export growth and continued strong performance in the eurozone.

"This is particularly good news for the North-East, as our manufacturing sector is more dependent on exports than in other regions."

But she added: "Longer-term prospects, however, are more uncertain for the sector."