Partner Article

Manufacturing Survey shows promise for industry

The manufacturing organisation EEF has said that although confidence in the sector is still fragile, the worst of the downturn has been and gone.

According to the fourth quarter survey released by EEF in conjunction with BDO, a combination of world market recovery and a weak pound is starting to have a positive affect.

However, Northern regions have seen balances below the UK average because of the continued weakness in metals.

Tom Lawton, head of manufacturing at BDO LLP, said: “Whilst it is pleasing to see that conditions in the sector have stabilised, with declines in orders easing, and somewhat brighter prospects on the export front, manufacturers still face a challenging year ahead.

“Fuelling this uncertainly is the continuing lack of credit from banks and credit insurers, concerns over further job losses and worries over exchange rate volatility.”

He added: “Cautious consumer spending and reduced public sector expenditures will also weigh heavily on the sector.

“The good news is that while we expect to see a flat performance across the first two quarters of 2010, we do expect to see a real improvement by the fourth quarter.”

EEF now look to Alistair Darling’s pre-budget report, hoping he will leave in supportive measures, while dropping plans to raise taxes that would stretch a company’s working capital during a recession.

EEF’s chief economist, Lee Hopley, said: “Manufacturers have been grappling with extremely difficult trading conditions for more than a year now, but we’re not out of the woods yet and a great deal of economic uncertainty remains.

“Cutbacks in investment remain of particular concern. Whilst the need to address the public finances in the long term is urgent, this must be balanced with the need to continue with supportive measures underpinning a productive sector of the economy.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .