North West manufacturers see major boost in last twelve months

EEF, the manufacturers’ organisation

A new report from EEF, the manufacturers’ organisation and BDO LLP, the accountancy and business advisory firm, shows that North West manufacturers have seen the biggest improvement compared to every other UK region in the last year, with the biggest increase in output and orders balances.

However, despite a strong year as a whole, output has started to tail off in the last three months as consumer and public sectors start to tighten their belts due to budget cuts and a squeeze on real incomes. The pharmaceutical sector, which accounts for 20% of the region’s manufacturing has had a poor start to the year while weaker consumer spending has hit the food & drink sector. This, together with increased political uncertainty, has hit investment intentions which remain subdued.

An improved picture is forecast for the second half of the year, however, which is reflected in improved job prospects where companies on balance expect to increase recruitment. This continues a trend over the last three years where North West recruitment intentions have trended above the national average.

The annual report – Regional Manufacturing Outlook – draws in survey data and the latest ONS figures to provide a longer-term and in-depth picture of the health of UK manufacturing. This year, it reveals that the North West now boasts 14,560 manufacturing businesses in the region, with food and drink, transport equipment and pharmaceuticals being the region’s main sectors.

The region continues to enjoy a healthy export record, accounting for 10.4% of the UK’s manufactured exports. Despite 52% of the region’s exports going to Europe, this exposure is the lowest of any UK region. In contrast, the share of North West exports which go to Asia, the Middle East, Africa and North America are above the national average.

Richard Halstead, interim region director in the North West at EEF, said: “Positive trends in UK manufacturing are being reflected here in the North West with the region seeing across the board improvement since the third quarter 2016. Confidence within the sector across the region remains strong in spite of a squeeze on domestic budgets.

“Uncertainty around the UK’s future relationship with the EU could be however hampering investment, but overall the outlook is positive.”

Graham Ellis, director and head of manufacturing at BDO in the North West, says: “The North West has seen a strong performance with a healthy export record, increases in output and orders balances and has strong recruitment intentions for the second half of 2017.

“However, to ensure continued growth, we need the Government to deliver a long-term, practical industrial strategy for the UK and the regions - with a focus on the mid-market and investing in education, skills and in the North West infrastructure. From better roads, rail links to reliable broadband connections and support for industry, the Government needs to help deliver the Northern Powerhouse ambition so North West manufacturers’ can continue to be successful in what will undoubtedly be challenging times in the short and medium term.”