Midland manufacturers expect a modest growth in output in the next three months as order books improve, according to a business survey.

Of the 425 manufacturers who responded to the latest monthly Industrial Trends Survey from the CBI, 28 per cent expect to increase their volume of output in the coming quarter, while 21 per cent expect it to fall.

The resulting balance of seven per cent is in line with the long-run average of six per cent and follows the expectation last month of a flat period for output.

Order books saw an improvement from August, when 19 per cent of firms reported them as above normal and 28 per cent said that order levels were below normal.

The rounded balance of -8 per cent was well above the long-run average of -17 per cent and back in line with July’s result of -6 per cent.

Richard Butler, CBI director, West Midlands & Oxfordshire, said: “Domestic and overseas demand have improved in this survey following last month’s falls, providing a foundation for somewhat better output growth expectations.

“Manufacturers believe that there will be a modest rise in output over the coming months, driven largely by the chemicals and food and drink sectors.

“But uncertainty is expected to build through the autumn – with key decisions to be made in the eurozone and the approach of the US fiscal cliff – meaning that conditions are likely to remain difficult for UK manufacturers.”

Export orders recovered in August with a balance of -10 per cent, comfortably above the long-run average of -21 per cent.

Stock levels rose to their highest level since October 2011 with a balance of 18 per cent stating that stocks are at least adequate to meet demand, a little above the long-run average of 14 per cent.