The snapshot of the manufacturing sector shows that while 23% of companies reported their order books to be below normal, 29% reported above normal levels. The balance of +6% is lower than last month’s 12 year high of +9%, but remains higher than average for the first half of 2007 (+3%).

This upbeat figure was underpinned by strong demand for capital goods – a balance of +17% of firms reported order books were above normal. In contrast, a balance of +1% of firms in the intermediate and consumer goods sectors cited ‘above normal’ levels.

Looking ahead to the next three months, the balance of firms expecting higher output volumes has increased to +17%. After the modest slowdown of July and August, this represents a return to the healthy growth rate of earlier in the year.