East Mids manufacturers begin year in ‘subdued mood’

East Midlands manufacturers have begun 2018 in subdued mood, according to a new survey published today by EEF, the manufacturering organisation and accountancy and business advisory firm BDO.

According to the EEF/BDO Manufacturing Outlook Q1 survey, manufacturers in the region are suffering from the tightening belts of consumers which has affected sectors such as food and drink where the East Midlands has a high concentration of companies. The data also reflects the fact the East Midlands has had a strong run of successive quarters of growth and reflects an easing of that picture.

This uncertainty is reflected in output, whilst still positive, falling to +14% although it is expected to rebound next quarter. Total orders also weakened considerably and dipped into negative territory at –9%, the weakest of any UK region.

This subdued picture is reflected in weaker recruitment intentions which fell to +9% after a couple of strong quarters whilst investment intentions also fell form healthy levels at the end of last year to +13%.

Despite the subdued outlook in the East Midlands at the start of the year there is a positive outlook for manufacturing overall in 2018 which has led EEF to upgrade its forecasts for the sector to +2.0% from 1.4% previously. This is faster than the UK economy overall where EEF is forecasting growth of 1.5% in 2018. Next year we see growth slower growth across the economy and manufacturing with expansion of 1.3% and 0.6% respectively.

Charlotte Horobin, region director for EEF in the East Midlands, said: “Manufacturing activity in the East Midlands began the year with a mixed picture, this reflects the uncertainty affecting particular sectors in which the region has a high degree of exposure. The overall picture for manufacturing looking ahead remains positive, however.

“As the Chancellor sets out some thinking about longer term economic priorities in his Spring statement next week, manufacturers will want to see a focus on how the new industrial strategy can help cut through Brexit uncertainty and turbo-charge investment ambitions right across manufacturing supply chains.”