North West manufacturers benefitting as UK recovery well under way

Darrell Matthews

Manufacturers in the North West are reporting a good start to the year with output, orders and employment all on the way up, according to the latest quarterly Manufacturing Outlook survey by EEF, the manufacturers’ organisation, and accountancy and business advisory firm, BDO LLP. The data, published today, reveals that manufacturers in the North West are confident that the reported UK recovery is firmly taking root in the region.

In the first three months of this year companies in the North West saw improving trading conditions relative to the previous quarter. Output, total orders, employment and investment all increased on balance, resulting in mounting confidence. As a result, firms are in good shape for the next quarter with a healthy balance of 38% of local manufacturers expecting to increase output, a balance of 32% anticipating an increase in total orders and 6% intending to boost employment during the next quarter of the year.

The findings suggest that the North West is keeping up with the rest of the UK where the recovery is well underway and where a number of key indicators, such as output, orders, employment and investment intentions, are approaching or have already hit record highs.

In the report, EEF says that translating firms’ intentions to invest and hire more staff into action will be the ultimate test for long-term economic recovery. It is calling on the Chancellor to gear his budget on March 19 to secure the best possible business conditions to support growth.

Darrell Matthews, EEF North West Region Director, says: “This is the most positive set of indicators we have seen for a long time. Here in the North West it looks like we’ve turned a corner and are actively heading down the right road.

“This is good news for the region and for the UK as a whole. Manufacturers are clearly feeling more confident as their order books fill up and exports strengthen. It’s now vital that the Government does all it can to underpin support for companies, giving manufacturers the confidence to fulfil their investment and recruitment plans.”

Philip Storer, partner at BDO LLP in the North West, says: “The broad nature of the recovery that this survey points to is a source for particular encouragement as it has been some time since all sectors have been moving in the right direction. The fact that this is underpinned by a significant strengthening of exports, especially to Europe, adds further stability to the foundations of growth. This should also give confidence to the Government that its support for the sector is starting to achieve the desired results and if implemented in a clear and carefully targeted fashion will continue to reap benefits.”

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