Britain’s manufacturers are enjoying buoyant conditions on the back of export markets strengthening, according to a survey published today by EEF, the manufacturers’ organisation.
The EEF/BDO Q3 Manufacturing Outlook survey found manufacturers have taken advantage of the upswing in the Eurozone as well as the synchronised upswing in global trade.
It said this boost in trade has benefitted all sectors, with the boost to confidence about individual firm performance translating into a positive picture for both recruitment and investment intentions in the near term.
In contrast to confidence about their company performance, however, the same cannot be said for their outlook for the UK economy where confidence indicators have dropped for the second quarter in succession in response to weak consumer spending and political uncertainty. Moreover, inflationary pressures have not completely subsided, with recent sterling depreciation likely to provide another ripple of price increases in the coming months.
Lee Hopley, Chief Economist at EEF, said: “Manufacturers appear to have taken the recent political upheaval in their stride and are taking advantage of growing world markets to make hay while the sun shines. This period is likely to be the peak, however, and we are likely to see a more stable picture in the coming months rather than any further significant acceleration.
“There is little doubt that Brexit is likely to weigh on sentiment over the next twelve months with uncertainty over the UK’s terms of exit. As such, it is vital the Government sends a signal to industry and investors in the UK and overseas that it is doing everything in its power to get growth of the UK economy back on the agenda. This must include a bold and ambitious cross -government industrial strategy.”
Tom Lawton, Partner and Head, BDO Manufacturing, said: “Despite the economic and political uncertainties, manufacturers’ continue to be a force to be reckoned with, delivering a strong performance as well as increasing both investment and employment plans to make the most of the strengthening export opportunities available to them.
“However, manufacturers’ confidence about the UK economy has continued to fall for the second quarter running. With growing opportunities around the world, particularly the Eurozone, manufacturers’ need stability and certainty in government policy (including Brexit) to provide the right environment for them to commit to the significant capital and research investment required to support continued growth.”
According to the survey, the balance of payments rose to an output level of 34 per cent.
The balance of companies taking on more employees rose for the fourth consecutive quarter to 25 per cent.
The survey covered 416 responses and was carried out between 2 and 23 August.