Demand for UK-made goods increased in recent months, with total order books improving further, but prices are expected to rise.

The Confederation of British Industry's (CBI) latest Industrial Trends Survey found that total orders reached a two-year high during the three months to February, with the strengthening in demand led by the mechanical engineering and metal products sectors. The survey of 471 firms also revealed that export orders remained stable, and above the long-run average.

Output growth remained robust during this time and is expected to increase at a faster pace over the coming quarter, said the CBI, with expectations currently at their highest since September 2013.

Firms expect prices to rise strongly over the next three months, with expectations at their firmest since April 2011, as Sterling’s depreciation continues to increase the cost of raw materials.

Commenting on the topic in DIY Week’s upcoming Made In Britain issue, Makita national sales manager Barry Smart said the company’s manufacturing centre had seen a rise in the cost of raw materials but added that it is currently being balanced by the Euro improvement by Makita’s sales into the Eurozone.

Whitefurze sales director Tracey Stone added: “The cost of raw materials has always fluctuated and this is something that any business must make allowances for.”

CBI chief economist Rain Newton-Smith said of the survey findings: “Stronger demand and production is good news for UK manufacturers, though the weaker pound continues to push up input costs and this is now feeding through to output price inflation expectations.

“With cost pressures building, businesses will be looking to the Budget for relief from business rates, specifically bringing forward the adjustment from RPI to CPI.

“Over the longer term, investment in education and innovation as part of the Government’s industrial strategy will really need to deliver in the face of increasing political headwinds.”

Read more about British manufacturing in the DIY and garden sector in our Made in Britain feature in the February 24 issue.