North East manufacturers “rebounded proudly” with high employment figures to end 2021, survey shows

North East manufacturers have seen a strong performance at the end of 2021, according to the quarterly Manufacturing Outlook survey from Make UK and advisory firm BDO.

According to the survey, output in the region reached a balance of +62 per cent, being the best performance of any UK region and a very strong figure by historical standards.

The figure was buoyed by strong domestic and overseas orders which were both above the national average and a reflection of world markets which have rebounded throughout the course of the year.

The North East also continues to benefit from “significant investment” in renewable energy and construction equipment where the region has an established presence.

As a result, the outlook for employment across the North East has significantly improved as companies hire to meet demand. The employment balance in the region was +31 per cent, which is considerably above national average.

Investment intentions also increased, “possibly in response to the Chancellor’s extension of the Annual Investment Allowance in the Autumn Budget”.

Fhaheen Khan, senior economist at Make UK, said: “While manufacturers in the North East will be able to enjoy some festive cheer this year, their spirits will be tempered by the eye watering impact of escalating cost pressures which are leading an increasing number to pass these on to the consumer.

“Given the global nature of some of these pressures there is little sign that they will abate anytime soon. However, they will hope as we enter a fresh year that these will gradually unwind, with the compensation being that demand prospects among their major markets continue to look strong.”

Steve Talbot, head of manufacturing for BDO in the North East, said: “Manufacturers faced a brutal 10 per cent decline in output in 2020. This year, they have rebounded proudly with some record-breaking figures throughout the year.

“Cost pressures – input prices, labour, logistics and inflation – are settling in for the long haul and will continue to impact manufacturers, however they can enter 2022 on significantly firmer footing than last year.”