According to the second quarter survey from the manufacturers’ organisation, EEF, and accountancy and business advisory firm, BDO, British manufacturers are experiencing a continued surge in performance as a result of a ‘synchronised upswing in global markets’.
Survey
The results of the survey indicated that manufacturing should continue to expand during the second half of the year, noted EEF, despite the impact on business confidence the recent political uncertainty of a snap election and Brexit negotiations were predicted to have.
Exporting was shown to be more positive in the views of manufacturers during the course of the last year. Demand in European markets was found to be particularly buoyant with more than 60% of companies surveyed reporting an upturn.
Additionally, positive output balances were reported across all sectors in the survey, which is in contrast to recent years’ results. However, the EEF has warned that there are no guarantees for the future with the uncertainty of household incomes being squeezed and the possibility of no deal on Brexit which could damage trade.
“Our survey marks another quarter of positive news about growth prospects for UK manufacturers,” commented EEF chief economist, Lee Hopley. “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.
“While growth and confidence hasn’t been knocked off track by the snap election, it is not plain sailing from here. There is the continuing challenge of managing input cost increases; ensuring success in attracting and retaining in 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.”
“The Q2 survey results present a very positive and exciting picture for manufacturing, showing increasing orders in both home and export markets,” added Tom Lawton, partner and head BDO Manufacturing. “The continued growth in the world markets such as Asia, North America and Europe are driving positive demand conditions. These results show yet again that manufacturing has the resilience and the qualities to form one of the foundations of a successful UK economy.
“Brexit does create uncertainty and it is important that the new government is clear that Brexit will be structured in a way that serves the best interests of business. As part of this it is vital that we remain open for business and negotiate new trade agreements with the EU and other markets so that international markets remain open and accessible as soon as Brexit is completed.”