LONDON, Jan. 22 (Xinhua) -- The optimism of Britain's manufacturing business improved at the fastest pace since April 2014 in the quarter to January, yet output volumes and total new orders continued to fall, said the Confederation of British Industry (CBI) Wednesday.

"With business optimism improving at its fastest pace since 2014 and some of the squeeze on investment plans lifting, it's clear manufacturers are entering the new year with a spring in their step," said Anna Leach, CBI deputy chief economist.

Investment intentions also improved in the same period, with a record proportion of firms expecting to authorise capital expenditure in order to expand capacity. However, a record proportion of manufacturers were concerned that a shortage of labour could constrain investment spending over the year ahead, said the CBI in a survey of 300 manufacturing firms.

"This boost to sentiment belies poor trading conditions over the past quarter, with output and orders still declining," said Leach.

According to the survey, output volumes in the three months to January fell at a similarly quick pace to last month, largely reflecting a sharp fall in motor vehicles output and marking the eighth month in a row of flat or falling output volumes.

"Total new orders fell at the quickest rate since the financial crisis, reflected by a similarly fast fall in domestic orders," said the CBI, noting that the headcount also fell in the quarter to January at their fastest pace since the financial crisis.

"If we are to build on this rebound in optimism among UK manufacturers, it is crucial for the UK and EU to establish a trade deal that supports growth in this sector," said Leach. Enditem

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