Uncertainty starting to hit confidence says EEF

THE North West is the best performing industrial region, but growing economic uncertainty is starting to take its toll, a survey said today.

The fourth quarter Manufacturing Outlook survey by EEF, the manufacturers’ organisation and accountancy firm BDO, shows that the civil aerospace and automotive sectors are driving growth in the region.
 
In the last three months, the North West has been the best performing in the UK with output and orders continuing to be positive at +24% and +13%.

This has been reflected in job prospects with recruitment intentions for the last quarter remaining strong at +28% which is above the long term average.
This growth continues to be driven to a large extent by the growth in the civil aerospace and automotive sectors which are enjoying strong demand. Both of these sectors have a large presence in the North West both directly and, through the supply chain.
 
Despite such positivity, forward prospects are much more gloomy as companies in the North West are expecting falling output and orders in the next three months.

Click here to read our supplement North West Manufacturing: Resilience and Growth Through Diversity.

However job prospects are holding up as more companies still recruit although the balance has fallen sharply to +7%.

This increasing economic uncertainty is reflected across all UK regions and, as a result, EEF has downgraded it’s forecast for manufacturing growth for 2012 to just 0.9%, down from it’s previous forecast of 2.2%
 
David Ost, EEF North West Region Director, said: “Manufacturing has been a key pillar in the recovery so far and it looks like the sector will still end the year on the up with positive output and orders responses posted over the past quarter.  However, short-term confidence has all but fallen away. 
 
“The signs of caution that had been emerging through the second half of this year have clearly become more entrenched as global growth concerns have escalated. 

“There are not only question marks over wider manufacturing prospects at the beginning of 2012, but also the exports and investment needed to underpin sustainable growth.” 
 
Philip Storer, partner at BDO in the North West, added: “Although exports have maintained a relatively strong performance in the quarter the continuing problems within Europe, which is by far our biggest export market, are clearly having an effect and generally increasing a feeling of nervousness and lack of confidence.
 
“However, despite this gloom manufacturing looks set to perform well in relation to other parts of the UK economy in 2012 and we would strongly encourage the government to increase the momentum of support for the sector in order to help rebalance and boost the economy.”