Manufacturing fights back says survey

A SURVEY released at the start of Manufacturing Week reports growing confidence amongst UK manufacturers and signs of demand improving.

The first quarter ‘Manufacturing Outlook’ report, published by EEF, the manufacturers’ organisation and accountants BDO, reveals a larger-than-expected improvement in output and orders over the past three months and a broad return of confidence across manufacturing.

Companies are the most upbeat since the financial crisis began in mid-2007.
But the EEF remained cautious about over-stating the improving picture, and said a number of risks remain to manufacturers’ prospects.

These include uncertainty about public finances, ongoing access to finance issues and the sustainability of recovery in key export markets. Consequently, investment intentions are likely to remain muted for some time, said the body.

Over the last quartera balance of -4% of companies across manufacturing in the North West reported rising output, a significant improvement on the previous quarter.

In addition more companies are now expecting output and orders to expand than at any time since mid-2007 with a balance of +27 per cent and +24 per cent of North West companies expecting output and orders to increase in the next quarter.

EEF North West director, David Ost, said: “Having emerged from the recession at the end of last year, the start to 2010 was better than expected. Clearly more companies are becoming more confident about their prospects. We’re beginning to see the real benefits of an export-led recovery.

“But we have to be cautious about predicting a strong rebound, as a number of factors could knock growth off track. The recovery depends on world markets continuing to grow, and the financial system’s ability to provide finance is yet to be fully tested.

“And investment plans are likely to remain on hold until manufacturers get a better sense of how a new government plans to repair the public finances.”

Philip Storer, partner at BDO in Manchester, said:””Manufacturing in the North West plays a key economic role both regionally and nationally, accounting for 13.1% of the value added to the UK manufacturing sector.” 

The EEF launched Manufacturing Week today to raise the profile of the sector and encourage supporters to lobby politicians for more support. More details can be found at www.lovemanufacturing.co.uk.