MANUFACTURERS' order books are at their healthiest for three years, a survey has found.

Domestic and export orders improved sharply last month, despite the growing strength of sterling, said employers' group the Confederation of British Industry (CBI).

The survey also found that export orders were at their highest level in more than seven years - strengthening the UK's manufacturing recovery.

According to the CBI, the strength of sterling had not had a noticeable impact on export orders, although domestic prices were coming under pressure as competition from cheaper imports increased.

Ian McCafferty, CBI chief economic advisor, said the figures showed the manufacturing recovery was gaining strength.

But he said: "The value of sterling is yet to have an impact on export orders, though manufacturers will be concerned if the pound strengthens further. Competition from cheaper imports has, however, renewed the downward pressure of domestic output prices."

The CBI's industrial trends survey, which questioned 803 manufacturers, showed that 21 per cent of companies thought total orders were above normal, while 29 per cent thought they were below.

The balance of minus eight per cent, compared with minus 15 per cent in the previous survey, is the strongest result since December 2000.