Manufacturers are upbeat on outlook

Tim Wallace
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MANUFACTURING in the UK remains healthy despite the weak economic outlook, according to a survey published today -- appearing to contrast with business surveys that have recently painted a bleak picture for the UK’s factories.

Industry bodies EEF and the BDO say output and orders are still rising across all sectors. The study covers the last three months, with exports cited as the main driver of growth.

Confidence is lower among smaller companies, however, who say they are less certain about the stability of orders over the next quarter.

The stats show the recovery may not be over, according to EEF economist Lee Hopley. “Manufacturers have bucked other recent negative indicators,” she said.

“Across much of the sector companies are still busy and orders are holding up, particularly from overseas markets. However, the growing challenges in the global economic environment in particular are casting a shadow over expectations.”

Since much growth has been export driven, worries about the global economy are particularly concerning, leading companies to hold back on investment and recruitment, Hopley warns.

A positive balance of 33 per cent of companies in London and the south east say they are expecting total orders to rise in the next three months. That means firms in the capital have some of the best prospects in the country.

The employment outlook is not quite so strong, though – a balance of just four per cent in the region expect to take on workers.

Overall, a balance of 12 per cent of manufacturers expect increased order from the UK in the next three months, showing demand is not yet collapsing.

Tom Lawton from the BDO said: “We have seen how small firms in Germany have been the catalyst for economic growth,” he says. “We should ensure our smaller manufacturing companies are given the support they require to thrive.”