The outlook has never been brighter for manufacturers in Yorkshire and Humber as they report record high demand as well as rising outputs and headcounts in the first quarter, according to the latest quarterly Manufacturing Outlook survey published today by EEF, the manufacturers’ organisation, and business advisers and accountancy firm BDO LLP in Yorkshire.
According to the survey, a balance of 47% of local manufacturers reported order growth in the first three months of the year. This is the strongest reading ever recorded for the first quarter, which typically has the lowest trading levels, and sits above the peak demand level for four years.
Alongside this strong start, output, employment and investment all increased, resulting in mounting regional confidence. Manufacturing outputs reached a balance of 41%, marking the highest level since mid-2011, whilst a balance of 47% of companies also increased headcounts. Yorkshire business confidence appears to have been buoyed by the strong economic recovery that continues to take root in the region.
Looking ahead, improving trading conditions have led to a balance of 30% of local companies to plan on increasing investments in Q2 to maximise potential growth opportunities.
The findings indicate that Yorkshire is well on course to mirror the UK as a whole, 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 to secure the best possible business conditions to support growth.
Commenting, Andrew Tuscher, EEF Yorkshire 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 Yorkshire it looks like we’re well and truly steaming 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.”
Jason Whitworth, partner at BDO LLP in the Yorkshire, said: “Yorkshire has seen an unprecedentedly good start to the year with record high demand and a significant increase in employment and manufacturing outputs, boding well for the coming year. We expect to see the region continue to strengthen as the wider 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%.
