A LACK of new export orders is threatening to hit UK manufacturing growth, a report has warned.

The Confederation of British Industry (CBI) says the sector’s recovery continued in the three months to October.

However, its Quarterly Industrial Trends Survey revealed the pace of change decelerated due to lagging exports, with orders and deliveries down to their lowest levels since January 2013.

The CBI also published monthly figures for October, which showed total order books among manufacturers had edged down to minus six per cent, the lowest level since July last year.

Its survey, which focused on 448 firms, revealed the balance of total new orders in the three months to October was nine per cent, with the balance for new domestic orders standing at 14 per cent, well above the long run average of minus five per cent.

It added 27 per cent of companies have increased workforce levels, with the same figure expecting a rise in output volumes in the next quarter.

Rain Newton-Smith, CBI director of economics, said: “It’s disappointing a sluggish exports market has taken some of the steam out of manufacturing growth, which was going from strength to strength throughout most of this year.

“However, growth in orders and output is expected to continue ahead, albeit with expectations moderating, and domestic orders have continued to rise at a healthy pace.

“It is also encouraging job numbers are growing.

“Nevertheless, the manufacturing sector is clearly facing headwinds.

“Global political instability, mounting concerns about weakness in the eurozone and recent rises in sterling are all weighing on export demand.”

According to the survey, 29 per cent of manufacturers expect total orders to increase in the next quarter, with a positive balance of 19 per cent on expectations over new domestic orders.

A further 19 per cent say they will increase staffing numbers in the period.