Export optimism in the U.K. has risen to the highest in two-and-a-half years thanks to the pound’s depreciation since the Brexit vote, according to the Confederation of British Industry.
The London-based lobby group said that overseas orders at factories have also improved, with its gauge rising to 8 in October from minus 2 in July. The latest quarterly reading is the highest since April 2014.
The CBI’s poll of 459 manufacturers also showed that competitiveness in European Union markets rose the fastest since the series began in 2000, with that outside the bloc also improving. That may reinforce the view that the U.K. economy will maintain its resilience since the vote to leave the EU in June. Data on Thursday may show the economy grew 0.3 percent in the third quarter, a slowdown from the previous three months, but far better than the recession some warned Brexit would trigger.
Monthly figures from the CBI show an improvement in export orders in October, though that index remained below zero. Total orders fell the most since February.
“Manufacturers’ are optimistic about export prospects and export orders are growing, following the fall in sterling,” said CBI Chief Economic Rain Newton-Smith.
Nevertheless, she noted that the weaker currency also has a downside and is feeding through to companies’ costs, which are “rising briskly.”
As firms prepare to pass that on to customers, the CBI’s quarterly index of domestic prices jumped to the highest since 2014.