Manufacturers in the East of England are still enjoying “very positive conditions” helped by a boost in export orders to Europe although firms’ confidence in the UK economy has slipped, says an EEF/BDO survey for the third quarter outlook. Output and orders showed strong balances +32% and +33% respectively and export orders (+14%) have stayed benefitted from the pick-up in the Eurozone and other growing markets and are expected to continue improving. Business confidence amongst firms in the region has reaches highest East of England which has reached the highest level in almost three years. Recruitment (+9%) and investment intentions (+5%) have continued to rise. But doubts remain on the UK economy and the EEF expects growth to slow to 1.7% this year and 1.3% in 2018.
Meanwhile, the latest national PMI survey of purchasing managers suggested growth in the services sector slowed to an 11 month low in August although it remained positive and firms were continuing to hire.
Charlotte Horobin, region director for EEF in the East of England, 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.”
Keith Ferguson, partner and head of manufacturing at BDO in the East of England, said: “Despite the economic and political uncertainties, manufacturers’ in the East of England 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.”
