Times will remain tough, says EEF

MANUFACTURING organisation EEF has revised down its outlook for the sector for the rest of this year.

Its mid-year economic forecast revises down the outlook for manufacturing in 2012 to -0.3 per cent (from a previous -0.1%) as the uncertainty in the Eurozone, the UK’s main export market, continues to bite.

However, according to the EEF’s forecast some stability should return in the second half of this year leading to a resumption of modest quarterly growth in GDP, whilst manufacturing activity should step up a gear as we enter 2013. The improving prospects for 2013 will continue to be driven by exports which are forecast to increase by 4.1% next year, mainly to markets outside the EU.

EEF Midlands region director Richard Halstead said: “The estimate for second quarter growth is again unlikely to flatter the UK’s economic performance. But the bigger question is where we go from here.

“Our forecast scenarios show the importance of bringing greater confidence and certainty to the private sector. The rebalancing process would be kick-started if firms were to push ahead with investment plans.

“But our forecast also shows the risks from another big shock such as a euro break up or significant deterioration in credit conditions for firms and households. Either event would knock the economy for six once again and further delay the onset of any green shoots of recovery.”