Factory orders drop sharply in October, says CBI

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Orders dropped at their sharpest pace since April, but the CBI still expects the economy to recover

Factory orders in October fell at their sharpest pace since April, according to the CBI business group.

Its quarterly industrial trends survey of 420 manufacturers recorded a drop to -28% this month from -17% in September.

The numbers refer to the difference between the percentage expecting the output volume to rise and the percentage expecting it to fall.

Despite the poor reading, the CBI said it still expects the economy to pick up after its poor showing between July and September.

It said firms were predicting a rise in output and further export order growth.

"The recovery in the manufacturing sector is well grounded and is expected to continue, this despite the soft patch last quarter," said the CBI's chief economic advisor, Ian McCafferty.

However, he also said that cost pressures were continuing and that would put further pressure on manufacturers' profit margins.

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