EXPORT order books are at their fullest for almost three years, a survey has found.

The finding sparked renewed hope of an upturn in the manufacturing sector.

Output is also expected to grow for the first time in almost a year, the CBI said in its monthly industrial trends survey.

The employers' organisation said it was clear UK manufacturers were still struggling, but said that conditions had shown signs of improvement.

Out of 886 firms surveyed, 11 per cent said their export order books were above normal, while 32 per cent said they were below. The balance of minus 21 per cent compares with minus 27 per cent last month, and is the best since January 2001.

Including domestic orders, the balance of minus 19 per cent is the highest level since June of last year.

Doug Godden, CBI head of economic analysis, said: "Manufacturers are still facing a really tough uphill battle, with over a third saying order books remain below normal. But the survey suggests conditions are slowly getting better."

For the first time since January, more manufacturers said output would rise over the next three months than said it would fall. The balance of plus five per cent does not represent substantial growth, but is still the strongest since October 2002.

The CBI said that manufacturers' prices, which have not made any significant progress for nearly seven years, were expected to continue to fall, albeit at the slowest rate since January 2001.

The survey was carried out between November 24 and December 8.