Manufacturers based in the West Midlands forecast output and orders to reach their highest level for 16 years as the UK economic recovery continues to take root in the region, according to the latest quarterly Manufacturing Outlook survey published today by EEF, the manufacturers’ organisation, and business advisers and accountancy firm BDO LLP in the Midlands.
Local manufacturers’ have the highest level of confidence since readings began in 1998, as they head into the next quarter, with a balance of 55% of companies expecting to increase output and a balance of 61% anticipating a surge in orders.
This positive outlook is supported by a strong demand for skilled workers, particularly in the aerospace and automotive industries, as hiring intentions rise to a balance of 35% for the next three months. Continued business optimism across the region has led to a record high number of manufacturers (a balance of 47%) planning to boost investment in the next quarter.
The findings suggest that West Midlands’ manufacturers are in great shape as they enter the next quarter, mirroring the UK as a whole, and where the recovery is well underway and key indicators, such as output, orders, employment and investment intentions, are approaching or have already hit record highs.
In the report, EEF says that translating firms’ intentions to invest and hire more staff into action will be the ultimate test for long-term economic recovery. It is calling on the Chancellor to gear his budget on March 19 towards creating the best possible business conditions to support growth.
Richard Halstead, EEF Midlands Region Director, said: “Looking ahead to the next quarter, this is the most positive set of indicators we have seen for some time. Here in the West Midlands it looks like we’ve not just turned a corner, we’re actively heading down the right road. Manufacturers are clearly feeling more confident as their order books fill up and exports are strong. It is now vital that Government does all that it can to underpin support for companies, giving manufacturers the confidence to fulfil their investment and recruitment plans.”
Tom Lawton, partner at BDO LLP in the West Midlands, said: “As local manufacturers forecasts hit a record high for anticipated outputs and orders we expect to see the region continue to strengthen as the UK recovery takes hold.
“The broad nature of the recovery that this survey points to is a source for particular encouragement as it has been some time since all sectors have been moving in the right direction. The fact that this is underpinned by a significant strengthening of exports, especially to Europe, adds further stability to the foundations of growth. This should also give confidence to the Government that its support for the sector is starting to achieve the desired results and if implemented in a clear and carefully targeted fashion will continue to reap benefits.”
EEF’s forecast for manufacturing growth in 2014 remains unchanged at 2.7%. However, EEF has increased its forecast for GDP growth to 2.6%.