Manufacturers stay hopeful on future growth

UK MANUFACTURERS are expecting a brighter summer, with optimistic predictions that demand will rise, according to the Confederation of British Industry.

Despite this, output remained practically flat over the three months to May. Over 400 firms were surveyed between 23 April and 15 May, and 27 per cent determined that volumes had declined, and 28 per cent that they had improved.

Firms have been expecting a surge in production for the past quarter. A third now envisage higher output in the three months ahead, while only 15 per cent expect a fall.

The food, drink and tobacco sectors performed most strongly and all have consistently been the most upbeat about future trade.

Eight per cent of manufacturers surveyed predict that prices will fall, while 12 per cent foresee an increase.

Anticipated price rises for metal producers are at their lowest point for four years. Expectations for the entire sector are at a half-year low.

The industry experienced a particularly poor 2012. Though there was moderate growth in other parts of the economy, production in manufacturing saw a 1.5 per cent contraction across the year.

The CBI’s director of economics, Stephen Giffords, said that even though expectations had overrun reality for some months, there were reasons to be optimistic.

“[W]ith orders improving and the global economy heading for calmer waters, it looks like conditions for manufacturers may be on the up,” he said.