"Manufacturing order books are holding up, and expectations for output growth are above their historical average, although they are less strong than earlier this year,"
said Richard Woolhouse, CBI Head of Fiscal Policy.
"Inflationary pressures have eased since the start of the year, with fewer firms predicting they will have to raise prices at the factory gate over the coming quarter," said Woolhouse.
Of the 510 manufacturers responding to the CBI's August monthly Industrial Trends Survey, 29% of firms described total orders as above normal, and 29% said they were below normal levels.
"The resulting rounded balance of +1% shows order books remain well above the long-term average of -18%, and is an improvement on the previous month's balance of -10%," said the CBI.
Expectations for growth in factory output over the coming quarter have picked up a little.
31% of firms predict that production will rise in the next three months, and 17% anticipate that it will fall.
It was encouraging that export business is holding up, with as many manufacturers said export order books were above normal, as said they were below.
In July there was a -8% imbalance.
But there is still concern around growth in the US and the Euro area.
"But the risks to manufacturing activity and business confidence have if anything increased, due to market volatility and the recalibration of growth expectations worldwide," warned Woolhouse.