CONFIDENCE in the manufacturing sector has shot up, though to a level that still indicates an expected decline, while the outlook for the service sector has slipped, according to a report from BDO released today.
Manufacturing confidence for the coming two months jumped to 90.5 in July, from 83.8 in June, the largest monthly bump for well over a year.
This came largely due to exporters diversifying their sales and reducing their exposure to the debt-pressured Eurozone, though since the value remains below 95 it still indicates decline.
But the optimism index showed that overall confidence hit a seven-month low after falling for five consecutive months to 93.1 in July. This came from a 2.1 drop to 93.8 in the service sector index, which outweighed the improved manufacturing forecasts.
“This month’s figures serve as a stark reminder of the continuing difficulties the UK economy faces,” said Peter Hemington at BDO.
“Where there is cause for cautious optimism is in the revived confidence in the manufacturing sector. The sector should be applauded for taking a pragmatic and adaptable approach to diversify exports away from the volatile Eurozone.”
Output figures in the report also recorded a fall, but the situation was less severe with the overall index dropping to 93.9 from 94.8, from a manufacturing slip of 1.3 and a service sector drop-off of 0.8.