Manufacturing growth to outstrip economy in 2014 – EEF/BDO survey
INCREASINGLY confident West Midlands manufacturers are expecting 2014 to be a year of strong growth for the sector, according to a major survey published today.
According to the survey, carried out by by EEF, the manufacturers’ organisation, and advisory and accountancy firm BDO in the Midlands, manufacturing output and orders remained strong in the final quarter of the year with positive balances of +47% and +27% respectively.
Demand across the region continues to be driven by the continued strength of the aerospace and automotive industries which is feeding down through the supply chain across the region. This is also resulting in strong demand for skilled people with a recruitment intention balance of + 18% for the last three months.
Looking forward, the outlook looks promising with manufacturers in the region expecting strong output (29%) and order balances (34%) to continue into the next three months. A balance of +31% of companies in the region are also planning to increase investment.
EEF is forecasting that this picture will continue into 2014 with the sector growing by 2.7% in 2014 compared to 2.4% for the economy overall. The improved performance during 2013 has also resulted in EEF revising its forecasts for this year, showing manufacturing contracting by just 0.1% and the economy growing overall by 1.4%
EEF Midlands region director Richard Halstead said: “Over the course of the year we have seen a definite turnaround in prospects for manufacturing and this looks set to continue into next year.
“This increased confidence is evident in companies looking to increase their headcount and, most importantly for balanced growth, step up their investment.
“However, uncertainties in the global economy remain and a sustained recovery is not secure. As a result, growth must remain a priority for government over the remainder of this parliament, starting with the Autumn Statement this week.”
Tom Lawton, partner at BDO in the West Midlands, said: “Continued strong demand within the domestic market is very encouraging and this does suggest that a sustainable manufacturing recovery has gained a foothold in the region.
“However, international markets hold the key to a fully-fledged and meaningful improvement and these markets remain frustratingly fragile.
“We haven’t missed the boat yet, but companies need to stand ready and be supported by an accessible Government-backed export framework in order to take full advantage of the recovery on the continent and beyond.”
