Surging exports lead to rise in manufacturing roles

Export boom boosts North East manufacturers

Manufacturers in the North East are continuing to enjoy positive conditions across most economic indicators according to a closely watched survey published by EEF and BDO LLP.

The Manufacturing Outlook survey for the third quarter shows that whilst output (+18) and orders have slipped back slightly from the last quarter’s very strong performance they are still firmly positive and are forecast to pick up in the final months of the year.

In particular, export orders (+20) 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. The UK market is much weaker, however, reflecting a pattern across the UK of consumers being squeezed and political uncertainty.

Despite the weaker UK market, business confidence amongst North East firms has risen to the second highest of any UK region. This is reflected in a continued boost for employment and demand for skills with recruitment intentions remaining strong at +19, whilst investment intentions have also remained positive.

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, Scott Duncan, regional manager for EEF in the North East, 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.”

Craig Burton, partner and head of manufacturing at BDO in the North East, said: “Despite the economic and political uncertainties, manufacturers’ in the North East continue to be a force to be reckoned with, delivering a strong performance as well as increasing 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.”