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Global upswing keeps region’s manufacturers on the growth track

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Manufacturers in the East of England are benefiting from an upswing in global markets and expect to continue to expand in the second half, according to a survey of the sector from EEF and BDO. Prospects in export markets have improved over the past year, particularly in Europe, where 61 per cent of firms nationally report positive demand. In the East, the second quarter survey points to a strong pick-up in output with a balance of 38% of firms seeing output rise over and a balance of 36% of firms reporting a saw a rise in new UK orders from a flat last quarter.

Investment levels have also nudged upwards and output is expected to remain strong in the next quarter with new orders holding steady and a balance of 25 per  cent of firms saying they will be actively recruiting staff. Output has grown across all sectors with the capital goods firms doing particularly well. A good pipeline of orders across the industry means recruitment intentions soared to the highest level in three years, whilst investment intentions rose for the third quarter running.

But EEF warned that the squeeze on household incomes and possibility of no deal on Brexit could hit trade and is calling for the new government to press ahead with a bold industrial strategy to help cement long-term growth prospects for the sector.

EEF regional director for the East of England, Charlotte Horbin said: “Our survey marks another quarter of positive news about growth prospects for UK manufacturers. Industry is reporting that output and orders have continued to head higher in recent months and the recovery in manufacturing globally is a big part of the story. It’s very encouraging that UK manufacturers have positioned themselves to capitalise on the windfall of a competitive pound and resurgent world economy.

“While growth and confidence hasn’t been knocked off track by the snap election, but it’s not simply plain sailing from here. There is the continuing challenge of managing input cost rises; ensuring success in attracting and retaining the skills that are in increasing demand and driving up investment in the sector. Whoever forms the next Government must set in stone as a matter of urgency a bold industrial strategy that will help cement the foundations for long-term growth for industry.”

Keith Ferguson, partner and head of manufacturing at BDO in East Anglia, said: “The Q2 survey results present a very positive and exciting picture for manufacturing, showing increasing orders in both home and export markets. The continued growth in world markets such as Asia, North America and Europe are driving positive demand conditions. These results show yet again that manufacturing has the resilience and the qualities to form one of the foundations of a successful UK economy.”

“Brexit does create uncertainty and it is important that the new government is clear that Brexit will be structured in a way that serves the best interests of business. As part of this it is vital that we remain open for business and negotiate new trade agreements with the EU and other key markets so that international markets remain open and accessible as soon as Brexit is completed.”

In response to the continued improvement in economic conditions EEF has revised its forecasts upwards. Manufacturing is now expected to expand by 1.3% in 2017 and 0.5% in 2018 (1% and 0.1% in Q1) and GDP by 1.8% and 1.3% respectively (unchanged from Q1).

Last Updated ( Friday, 28 July 2017 11:26 )