Manufacturers 'see strong growth'
September 3, 2007
UK manufacturers have recorded their best performance for more than 10 years, the EEF has said.
The balance of firms recording a rise in orders and output for July, August and September was +30%, with companies enjoying "sustained" growth.
The balance was at its highest level since early 1995, the manufacturing group added.
But the group warned that turbulence in the financial markets and a US slowdown could weaken the outlook.
Given potential problems overseas, the EEF welcomed the survey's finding that domestic orders had overtaken export orders for the first time since the final quarter of 2002.
Employment prospects
The report, produced with financial firm Grant Thornton, found the net balance of companies registering a growth in domestic orders increased from +8% to +17% while exports also grew from +10% to +12%.
The figures come despite five interest rate rises in the past year.
"Manufacturers are now enjoying a sustained period of growth and reaping the rewards of increasing their investment in skills and innovation," said EEF chief economist, Steve Radley.
"Long gone are the days when a strong currency and increases in interest rates would have stopped companies in their tracks."
They said that the positive trends were also reflected in employment, with a balance of +9% of firms saying they intended to take on staff.
Sectors including mechanical engineering, electronics and electrical equipment registered particularly strong increases in output and orders, the report said.
"The growing focus on high quality, value added products across the spectrum of UK manufacturing is continuing to pay dividends, with manufacturers becoming increasingly successful at developing niche areas," said Bob Hale of Grant Thornton.
"With order books remaining strong, manufacturers are optimistic about the rest of the year in regard to investment in capital and people, but interest rate stability would certainly help."
The EEF - which surveyed 866 companies - added that the manufacturing sector should continue expand both this year and in 2008.
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