Manufacturing sees ‘buoyant’ European demand, survey says

welderImage copyright
Thinkstock

British manufacturing growth remains strong, with exports up and companies positive about prospects for the rest of 2017, a survey shows.

The EEF employers’ organisation, which said companies’ recruitment plans are healthy, raised its manufacturing growth forecasts for 2017 and 2018.

The survey, compiled with accountancy firm BDO, said demand from European markets was particularly strong.

Despite Brexit fears and the election, confidence is high, the EEF said.

The quarterly survey said that demand in European markets “looks especially buoyant”, with 61% of companies surveyed reporting an upturn.

The balance between firms planning to recruit and those contracting stood at 21% during the quarter, up from 18% in the previous three months.

Optimism about future growth also rose, leading the EEF to revise upwards its forecasts. Manufacturing is now expected to expand by 1.3% in 2017 and 0.5% in 2018, up from 1% and 0.1% respectively.

EEF chief economist Lee Hopley said: “Industry is reporting that output and orders have continued to head higher in recent months and the recovery in manufacturing globally is a big part of the story.

“It’s very encouraging that UK manufacturers have positioned themselves to capitalise on the windfall of a competitive pound and resurgent world economy,” she said. All sectors within manufacturing had seen growth.

There were, however, plenty of economic unknowns that could derail growth, she said.

The continued squeeze on household incomes and the possibility of no deal on Brexit could damage trade, Ms Hopley said.

She added: “There is the continuing challenge of managing input cost increases, ensuring success in attracting and retaining the skills that are in increasing demand and driving up investment in the sector.

“Whoever forms the next government must set in stone as a matter of urgency a bold industrial strategy that will help cement the foundations for long-term growth for industry,” she said.

Facebook

Get the Facebook Likebox Slider Pro for WordPress