North West manufacturers continue to profit from export strength – EEF/BDO survey

EEF, the manufacturers’ organisation

Manufacturers in the North West are continuing to enjoy positive conditions across most economic indicators according to a closely watched survey published today by EEF, the manufacturers’ organisation and accountancy and business advisory firm BDO LLP.

The EEF/BDO Manufacturing Outlook survey for the third quarter shows that UK orders were at their highest level for a year, whilst the continued boost from exports took the total orders to the highest of any UK region (+41)

In particular, export orders (+24) are especially strong, reflecting the national picture of a sector benefitting from both a pick-up in the Eurozone and other growing markets around the world. This picture is expected to remain stable in the coming months.

This strong performance has boosted business confidence amongst North West firms, reflected in a continued demand for skills with recruitment intentions reaching the highest level for three years at +29, the second highest of any UK region. Furthermore, this increased confidence has passed through to investment intentions which have returned to the healthy levels seen at the start of the year (+21).

Despite the buoyant picture, the cloud on the horizon remains the UK economy. While firms are confident of their own performance, EEF’s indicator for the UK economy has slipped for the second quarter running in response to the continued political uncertainty and squeeze on consumer spending. As a result EEF continues to expect tepid growth of 1.7% this year and 1.3% in 2018.

Commenting, Richard Halstead, Interim Region Director for EEF in the North West, said: “Manufacturers appear to have taken the recent political upheaval in their stride and are taking advantage of growing world markets to make hay while the sun shines. This period is likely to be the peak, however, and we are likely to see a more stable picture in the coming months rather than any further significant acceleration.

“There is little doubt that Brexit is likely to weigh on sentiment over the next twelve months with uncertainty over the UK’s terms of exit. As such, it is vital the Government sends a signal to industry and investors in the UK and overseas that it is doing everything in its power to get growth of the UK economy back on the agenda. This must include a bold and ambitious cross -government industrial strategy.”

Graham Ellis, Director and Head of Manufacturing at BDO in the North West, said: “Despite the economic and political uncertainties, manufacturers’ in the North West continue to be a force to be reckoned with, delivering a strong performance as well as increasing both investment and employment plans to make the most of the strengthening export opportunities available to them.

“However, manufacturers’ confidence about the UK economy has continued to fall for the second quarter running. With growing opportunities around the world, particularly the Eurozone, manufacturers’ need stability and certainty in government policy (including Brexit) to provide the right environment for them to commit to the significant capital and research investment required to support continued growth.”