Manufacturing industry in Northern Ireland is weathering the problems caused by sterling's de facto revaluation better than most other UK regions, the Confederation of British Industry notes in its quarterly "Regional Trends Survey".

Orders, output and employment have increased over the past four months in contrast to setbacks experienced by industrial firms in mainland Britain and business optimism is on the rise.

Nationally, the CBI's survey findings disclose flat or falling manufacturing order books in most regions, largely due to a decline in export orders affected by sterling's revaluation.

In Northern Ireland, however, the CBI survey found that "new orders picked up in the past four months - new export orders fell only slightly". Four months ago, the business community was looking for a "strong bounceback" from the trend of declining demand experienced from the beginning of this year.

"The latest results show that, although not as strong as anticipated, this bounceback has indeed occurred," says the CBI. "Expectations in April were that the bounceback would affect both domestic and export markets. However, new export orders fell over the past four months.

"Although the decline was not as severe as in the previous four months, it still leaves total export order books well below normal - and also implies that it is the growth in domestic demand that has been strong.

"Manufacturers in the Province expect both total and export orders to rise further in the coming four months. Indeed, their current general level of optimism about the business situation has been expected only twice in the past two years." As with new orders, expectations of renewed growth in output have been realised although not on the anticipated scale.

The CBI says this is "an excellent result" as output had previously been on a falling trend. Employment growth over the past four months has been "strong". Indeed, the CBI notes that employment growth has been the strongest since 1980. Ahead, manufacturers expect to increase employment but at a weaker pace than during the past four months. Despite growing orders, rising output and employment and high levels of optimism, manufacturers have reined back their investment intentions. Investment in both plant and machinery and buildings is expected to decline over the next 12 months, possibly due to concerns over labour shortages.