Manufacturers in the East Midlands have continued their upward trajectory, reporting positives across every key indicator of business health, according to the latest quarterly Manufacturing Outlook survey by EEF, the manufacturers’ organisation, and accountancy and business advisory firm, BDO LLP.
The EEF/BDO data, published today, reveals a balance of 29% of local manufacturers have scored a hat trick by reporting an increase in output, orders and recruitment during the last three months.
The results are particularly promising considering when asked three months ago, local manufacturers expected output and recruitment to fall into negative territory.
The Q3 findings show that manufacturers’ strong start to the year has been sustained; however one area of caution is exports. An increasingly difficult trading environment overseas has seen export orders turn negative for the first time since the start of 2013.
Richard Halstead, Midlands Region Director at EEF, says: “Growth in manufacturing remains positive in the East Midlands, although confidence is understandably starting to return to more moderate and sustainable levels as the pent-up demand which built up during the recession begins to expire.
“However, there are clearly increasing downside risks overseas which could threaten the pattern of growth going forward. In the face of this, while politicians may be focused on next year’s election it is critical that efforts over the rest of this parliament remain focused on sustaining growth across manufacturing and the economy.”
Rick Wilson, partner at BDO LLP in the East Midlands, added: “The results come as welcome news to our regional economy and the local jobs market, with growth and investment feeling realistic at these levels. There is nervousness surrounding overseas market, so a strong recovery in exports this year is still uncertain. I would urge companies to avoid using this as an incentive to focus investment on domestic-only markets, as this is not where long term sustainable growth will lie.”
The EEF/BDO Manufacturing Outlook survey shows that most sub sectors reported an increase in output, with motor vehicles across the Midlands especially strong performers. Rubber and plastics manufacturers were the most upbeat with a balance of +80% of companies increasing output in the past three months. Electronics was the only sector to report falling output.
BDO’s Rick Wilson added: “Although there is a mixed picture across manufacturers as a whole, both domestic and export demand for UK produced motor vehicles remains strong, due mainly to a continuing backlog, which is good news for the wider Midlands market. However, this cannot be relied on forever and it will be interesting to see which of the sub sectors emerges as the industry champion over the next six months or so.”
Nationally, EEF is continuing to forecast strong manufacturing growth at 3.3%, with a return to more normal long-term growth of 2.1% in 2015. Other key findings across the UK are:
• Output and orders balances positive, but down from last quarter.
• Domestic market remains the driver of output growth.
• Manufacturers expecting stronger export demand, despite past disappointment.
• Recruitment and investment intentions ease back, but remain solid.
