Even with the uncertainty of Brexit hanging over us, we are seeing growth in the UK manufacturing sector.
The Confederation of British Industrial (CBI) Latest Trends Survey in June showed export orders were at a 22 year high. Manufacturers are currently employing staff at the fastest rate since mid-2014. The total order books reached their highest level since August 1988 showing very positive results for the industry. The food, drink, tobacco and chemical sectors performed particularly well and businesses expect production to rise over the next 3 months.
‘Made in Britain’
The CBI Chief Economist, Rain Newton-Smith commented, “Britain’s manufacturers are continuing to see demand for “Made in Britain” goods rise with the temperature. Total export order books are at highs not seen for decades, and output growth remains robust.’
He continued, “Nevertheless, with cost pressures remaining elevated it’s no surprise to see that manufacturers continue to have high expectations for the prices they plan to charge.”
Newton-Smith then said, “To build the right future for Britain’s economy, manufacturers and workers, the Government must put the economy first as it negotiates the country’s departure from the EU. This approach will deliver a deal that supports growth and raises living standards across the UK.”
Growth in Exports
Exports have been boosted by the lower value of sterling against the euro and the dollar, together with the improving global economy. The EEF quarterly survey showed 61% of companies surveyed reported an upturn. The EEF predicted the UK economy would grow at 1.3% this year and 1.1% next year. These predictions have been revised to 1.6% for 2017 and 1.4% in 2018.
EEF chief economist Lee Hopley stated, “It’s very encouraging that UK manufacturers have positioned themselves to capitalise on the windfall of a competitive pound and resurgent world economy.”
Economists hope that these positive results from the manufacturing industry will offset the consumer spending downturn, although Brexit negotiations could impact these encouraging results in the first half of this year. We will wait to see what happens during the remainder of 2017.