Midland manufacturers set for export growth

MIDLAND manufacturers are now better placed to compete in foreign export markets than for many years, the head of EY in the region has said.

Sara Fowler said she was basing her claim on the latest predictions form the influential EY ITEM Club.

“The EY ITEM Club’s spring forecast reported that opportunities for UK exporters will improve, with predicted growth in export volumes of 5.3% this year and 5.9% in 2015,” she said.

“With additional Government support, including access to cheaper export loans, many Midlands manufacturers are now better placed to compete in overseas markets.

“Successful exporters target the right geographies with competitive product offerings, backed by world class infrastructure.  Our advice to companies in the Midlands is for companies to determine where they can and should compete. They need to identify the markets with the best growth prospects, assess the competitiveness of their goods and services in these markets, evaluate the opportunity to differentiate their brand and look to mitigate regional structural weaknesses impacting their export offering.”

EY is aiming to use the improving picture to target new business for itself. It plans to help businesses in the area implement more efficient export strategies by tapping into its global network.

Elsewhere, the ITEM Club said in its spring forecast that the UK was set to experience a long period of low inflation expansion as the economic recovery moved on to a firmer footing.

It said the economy would see growth of 2.9% this year as favourable labour market factors created “decent but unspectacular growth” underpinned by low inflation.

Consumer spending is predicted to continue to lead the recovery boosted by wage increases of 1.7% this year – overtaking forecasted inflation of 1.6%. Its latest quarterly report forecasts that earnings growth will continue to steadily pick-up as the demand for labour strengthens and skills shortages appear in some sectors.
At the same time, slowdown in the emerging markets will put downward pressure on commodity prices. The forecast predicts growth exceeding inflation on a sustained basis, after six years of falling real wages.

With inflation under control and a stronger pound, the forecast predicts that the Monetary Policy Committee (MPC) will keep interest rates on hold at 0.5% until the third quarter of 2015 – at which point rates will rise very gradually.