UK manufacturing reaches 3 year peak
3 Sep 2013
A surge in manufacturing output has seen production hit a three-year high, according to data released today by the manufacturers’ organisation EEF.
A balance of 32% of companies surveyed by EEF reported increased output, up from 12% in the last quarter and the highest since the beginning of 2010.
In particular this quarter has seen a steep rise in the domestic market, which has often fallen behind exports.
“As companies become more confident about their growth prospects, we need to see this translate into commitments to invest in new capacity and for this to take place in the UK,” said Lee Hopley, chief economist at EEF.
Let’s reiterate, this is not ‘manufacturing sector - job done’ for the government
Head of manufacturing at BDO LLP Tom Lawton
The survey suggests that investment across all manufacturing sectors is beginning to re-stabilise on ground lost over the past three years, especially among small and medium enterprises (SMEs).
“A domestic market at its strongest for almost three years, backed by export sales at a two year high, means UK manufacturers across all sectors and throughout the supply chain are feeling the benefits of an impressive return to confidence,” said Tom Lawton, head of manufacturing at business advisory firm, BDO, which carried out the research for EEF.
“But let’s reiterate, this is not ‘manufacturing sector - job done’ for the government. We must use it as a strong foundation for continued efforts to ensure the sector gets the support it needs to act as an engine of change for the UK economy.”
Order balances also saw a sharp increase, up 20% in the last quarter with the strongest figures being recorded in the electrical equipment and motor vehicles sectors, up 35% and 39% respectively.
“We’re seeing a consistent and positive trend across UK manufacturing and today’s data reinforces the view that the sector is back on the road to recovery. Improving output and orders are evident across all key (manufacturing) sectors,” added Hopley.
Forecasting over the next three months, companies expect orders from both domestic and export markets to increase by 24% and 19% respectively, with UK demand expected to continue to outweigh demand overseas.
