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Britain’s manufacturers are remaining resilient and continuing to take advantage of growth in global markets, in spite of the increasing uncertainty in Europe, according to a major survey conducted by EEF, the manufacturers’ organisation, and business advisers BDO LLP. The survey showed positive responses on output across manufacturing during the past three months. Investment balances have remained firm, whilst demand for skilled staff continues to drive positive recruitment intentions. However, EEF added a significant caution that, despite the relative strength of the survey results, the continued political and economic uncertainty in the eurozone and any possible deterioration in the European economy as a result, may yet impact significantly on manufacturers’ confidence and prospects. Tom Lawton, head of manufacturing at BDO LLP, said: “The results from this latest survey show that UK manufacturing remains surprisingly resilient in the face of the combined headwinds of renewed eurozone uncertainty and a very tight lending market. Exports seem to be holding up reasonably well supported by increasing trade with emerging markets which may well be critical as the eurozone continues its downward spiral. “During the next few years the success of the sector will almost certainly depend on how quickly we can switch our export focus to the emerging growth markets, and this will require a shift in thinking amongst many manufacturers. The results also show that the economic uncertainty appears to be hitting smaller companies hardest, causing cashflow problems amongst those with the shallowest pockets. Measures to help protect and support these companies must be made a priority or else we face the prospect of losing the type of innovative engineers for which the UK has become globally renowned.” Looking forward, expectations for the next three months are generally strong with the balance of manufacturers in most sectors expecting orders to increase. All sectors were also more positive about export orders, with the exception of rubber and plastics. However, following the sharp contraction in manufacturing output at the end of last year, the sector is forecast to show a small year-on-year contraction for 2012 of -0.1% with GDP growth of just 0.2%. The recovery is forecast to gain further momentum through the latter part of this year and into 2013, barring any further shocks with EEF forecasting manufacturing growth of 2.2% in 2013 and GDP growth of 1.8%. Other Business Money News
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