Manufacturers in the South West are consolidating their return to rapid growth according to the fourth quarter Manufacturing Outlook survey published by EEF, the manufacturers’ organisation, and BDO LLP.
This strong performance, which continues to be broad-based across all sectors, has been underpinned by robust demand from overseas markets, especially exports to the ‘BRIC’ economies, which have made a large contribution to export growth since the recovery began.
The survey shows that manufacturers have also been recruiting new employees and making some new investments in response to the stronger than expected recovery in production.
In the South West, around eight in ten manufacturers reported either growing or stable output and 90% said that total new orders were either at the same level or had increased over the previous quarter.
Clive Turner, head of external affairs for EEF in the South West, commented: “Manufacturers in the south west are working incredibly hard to sustain the recovery that started at the beginning of the year.
“However, the backdrop to ongoing growth through 2011 remains an uncertain one, particularly for those companies with a heavy reliance on publicly-funded contracts. And the strong bounce back has also brought challenges, with some manufacturers struggling to get the skills they need and facing rising costs.”
South West manufacturing highlights:
• Total output up or stable for 83% of regional manufacturers
• Total new orders up or stable for 90%
• Employment is rising in 33% of companies
• Planned capital expenditure is up or stable among 97%
Jim Brown, Partner at BDO LLP, said: “This broad based recovery shows that manufacturing can be the flag bearer for the vital private sector growth we need as impending cuts mean the public sector must take a back seat.
“Manufacturers now need to take advantage of this continued growth by investing in capital equipment and the skills within their workforce. They should also take the opportunity provided by the UK’s competitive currency to grow market share overseas both in the Eurozone and emerging markets.”
EEF also published its latest forecasts for the UK economy and manufacturing. These show the economy growing by 1.8% and 2.1% in 2010 and 2011 respectively whilst manufacturing will grow by 3.8% in 2010 before easing back slightly to 3.2% in 2011.
