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UK manufacturers plan record investment

17 March, 2014

UK manufacturers are enjoying increasingly strong growth thanks to a combination of strong domestic sales and a boost in overseas trade, according to the latest quarterly survey by EEF, the UK manufacturers’ organisation and BDO, the business adviser and accountancy firm.

The EEF/BDO Q1 manufacturing outlook survey reveals a more consistent picture than in recent quarters with strong conditions spreading to all regions and sectors, and healthy balances for both UK and overseas sales.

The positive outlook is being translated into record high intentions for recruitment and investment ­– the highest levels ever recorded in the survey.

A balance of +31% of companies survey are planning to increase their workforce in the next three months – well above expectations last quarter, especially for larger companies.

And investment intentions have strengthened for a fourth consecutive quarter to +34% – the highest level in the history of the survey. This is important to ensure a balanced growth, says EEF, especially as the positive intentions are coming from most sectors and from firms of all sizes. It adds that translating firms’ intentions to invest and hire more staff into action will be the ultimate test for long-term economic recovery.

Hopley: We're heading down the right road

“This is the most positive set of indicators we have seen for some time, demonstrating that we’ve not just turned the corner, we’re actively heading down the right road,” says EEF chief economist, Lee Hopley. “Manufacturers are clearly feeling more confident as their order books fill up and exports are strong. It is now vital that Government does all that it can to underpin support for companies, giving manufacturers the confidence to fulfil their investment and recruitment plans.”

According to the survey, output and order balances edged higher compared to the final quarter of last year to +22% and +20% respectively. The strongest positive balances were reported by companies in the electronics, automotive and electrical equipment sectors.

EEF’s forecast for manufacturing growth in 2014 remains unchanged at 2.7%. However, it has raised its forecast for UK GDP growth to 2.6%.

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