Manufacturers in the South West look set to end the year on solid ground, with output and recruitment intentions continuing their upward trajectory in Q4 2014.
According to the latest Manufacturing Outlook survey by EEF, the manufacturers’ organisation, and accountancy and business advisory firm BDO LLP, a balance of 14% of companies in the region witnessed an increase in output in Q4.
This growth is predicted to continue into the start of next year, with a balance of 23% of firms expecting output to rise in the first quarter of 2015.
Strong outputs have had a positive impact on the labour market in the South West, with a net of 29% of firms hiring more staff, far exceeding the forecast of 18% from the last quarter.
Order books for manufacturers in the region have remained fairly stable throughout the year, with a balance of 10% of companies seeing orders increase in Q4. However, the number of companies expecting growth in orders is forecast to fall to a net of 5% in Q1 2015.
UK-wide the sector has performed well during 2014 and is on track to achieve 3.5% growth this year, with a forecast of 2% growth in 2015. The one area of caution, however, is in exports. Geo-political risks, global uncertainty and the weak performance of the Eurozone have contributed to a more cautious look.
Phil Brownsord, EEF South West Region Director said: “2014 has proved to be a solid year for South West manufacturers. As we steam into 2015, it’s going to be a case of ‘steady as she goes’ with firms viewing next year with a mixture of grit, determination and realism.
“There have been some notable areas of strength this year, especially among sectors relying on demand in the home market. The fact that companies have continued to recruit shows they have a positive view of their prospects ahead.”
Paul Falvey, tax partner and head of manufacturing for BDO LLP in the South West, commented: “The results come as welcome news to our regional economy and jobs market. Working against the headwinds of poor export markets, the strength and resilience of sector firms have once again shone through this year.
“What’s exciting, yet equally frustrating, is that manufacturers would have even more growth potential if the right support was in place. The Chancellor must do his bit in this week’s Autumn Statement to back businesses looking to invest, recruit and move into new markets.”
