LONDON (Reuters) - British factory orders slowed to their lowest level in seven months in May but manufacturers remained optimistic about the short-term outlook, the CBI's monthly industrial trends survey showed on Thursday.
The Confederation of British Industry survey's total order book balance fell to -5 this month from +1 in April.
The export order book balance improved slightly to -7 from -11, the CBI said, possibly reflecting signs of a nascent recovery in the euro zone.
"Things are looking up for our manufacturers, with growth continuing and export orders improving," Rain Newton-Smith, the CBI's director of economics, said.
"Some of this could be down to an improvement in the euro zone's momentum, but the strengthening pound is still proving quite a challenge."
British finance minister George Osborne said in speech to the CBI on Wednesday that improving productivity would be a priority of the new Conservative government.
Looking ahead, manufacturers remained upbeat about their prospects as the balance for output volumes for the next three months edged down only slightly to +15 from +16 in April and remained more than double its average level since 1995.
Britain's overall economic growth slowed sharply in the first quarter of 2015 but is expected to bounce back in the April-June period.