British manufacturing growth will continue into 2015, says industry report
Manufacturers in the UK have had an upbeat start to 2015, according to a survey published by manufacturers’ organisation EEF and law firm DLA Piper.
A total of 400 firms were part of the survey. The results revealed that many British manufacturers are seeing better demand from European customers.
All in all manufacturers are confident for prospects and the economy in the year ahead.
The positive run of output expansion across manufacturing for the past eight quarters will carry on in the first half of 2015 and investment plans continue to look “robust.”
EEF forecasts healthy growth at 1.7% this year – revised down from 2% last quarter.
GDP is expected to rise by 2.8% in 2015 – revised up from 2.6% last quarter.
Lee Hopley, the EEF’s chief economist, said:
“Any concerns that manufacturing activity might wobble at the start of 2015 have been quashed with our latest survey showing that the main output, orders, employment and investment indicators all remained above their long-term average over the past three months. Particularly promising are signs of a return to growth in new export orders, vital for balanced growth in the UK.
“It’s clearly not plain sailing for all with the drop in the oil price feeding through to weaker demand in the oil and gas supply chain. While confidence levels overall are holding firm in manufacturing, policies to sustain positive investment plans, encourage exporters and improve access to skills remain the order of the day.”
North West reported a decline in output, hit hard by low oil prices
The survey results are good overall. However, some areas of the UK, such as North West England, have been hit hard by the fall in oil prices, with output, orders and employment not looking strong.
A net 6% of the North West manufacturers reported a decline in output.
Darrell Matthews, North West director at EEF, said: “Nationally any concerns that manufacturing activity might wobble at the start of 2015 have been quashed, but here in the North West it’s been a less upbeat story.
“These findings show that it’s not been plain sailing and the drop in the oil price has fed through to weaker demand in the oil and gas supply chain, which is significant in this region.
“This had an impact on orders, output and employment in the first quarter – the only indicator to stand up was investment.
“However, we look to be turning a corner with all of these areas set to move back into positive territory in the quarter ahead.”
He added: “While confidence levels overall are holding firm, policies to sustain positive investment plans, encourage exporters and improve access to skills remain the order of the day.”
David Gray, partner in DLA Piper’s Manchester office, said:
“Despite the impact of the fall in oil price, the sector in the North West retains an expectation that it will be able to pursue export growth as part of its plans for investment. This reflects the support that we are providing to the manufacturing industry locally, utilising our extensive global coverage.”