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Britain’s manufacturers are enjoying increasingly strong growth thanks to a combination of strong UK sales and a boost in overseas trade, according to the latest quarterly survey by EEF, the manufacturers’ organisation and business advisers and accountancy firm BDO.
The EEF/BDO Q1 Manufacturing Outlook survey reveals a more consistent picture than in recent quarters with the strong conditions spreading to all regions and sectors, and healthy balances for both UK and overseas sales. And the positive outlook is being translated into record high recruitment - the highest levels recorded in the survey.
+31% of companies plan to increase employment in the next three months which was well above expectations last quarter, especially for larger companies. The broad based nature of growth was illustrated by the fact all sectors increased employment, with the strongest balances in the motor vehicles and electronics sectors.
In its 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.
EEF Chief Economist, Ms Lee Hopley said: “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. 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.”
Tom Lawton, Head of Manufacturing at BDO added: “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,” he added.
EEF’s forecast for manufacturing growth in 2014 remains unchanged at 2.7%. However, EEF has increased its forecast for GDP growth to 2.6%.