Manufacturing order books in April were still “below normal”, but they now stand at the highest level reached in the last 10 months, the Federation of Industry said yesterday.

Announcing the results of its April Industry survey, the FOI said that as a consequence of this improvement in both domestic and external demand, manufacturers’ expectations for production growth had improved to reach the highest levels ever recorded in this survey series.

“Different sectors underwent a notable split in fortunes. In April, the Intermediate Goods Sector registered significant ‘above normal’ order books in contrast to ‘below normal’ order books recorded in the previous two months. The Investment Goods Sector registered strengthening domestic demand, and ‘above normal’ export order books compared to ‘below normal’ export order books in March. At the same time, domestic and external demand for Consumer Goods declined,” said the FOI.

Production expectations remained in positive territory for all three sectors. This indicator strengthened significantly for the consumer goods sector and the investment goods sector, but weakened slightly for the intermediate goods sector.

The number of firms with “above normal” stock levels has continued to increase gradually as it has been doing since December 2005, said the FOI, adding that this build-up in stock levels, combined with an expected increase in overall manufacturing employment, is intended to meet current and future demand for locally produced goods.

Nonetheless, the federation added, most manufacturers plan to reduce their selling prices. This, together with higher energy and fuel-related bills and other cost increases, should keep the profit margins of manufacturing firms under significant pressure.