UK manufacturing witnesses boom as orders continue to rise
New Confederation of British Industry statistics show that manufacturers are continuing to feel positive about their performance.
Manufacturing in the UK had something of a poor reputation for many years and was especially hard-hit by the financial crisis. Since then, the government has been attempting to rebalance the economy towards production and exports rather than importing from abroad.
As the most recent Industrial Trends Survey from the Confederation of British Industry (CBI) shows, the UK’s manufacturers are continuing to enjoy a trend towards growth.
It surveyed more than 450 companies and showed that firms reported strong growth in new orders in the three months to July. In fact, the figures show that total order growth was up on the previous quarter – even though that represented the best performance for 19 years. Domestic orders alone increased at the sharpest rate since 1988.
Exports, however, have not quite followed suit, remaining flat on the last quarter’s figures. Export price inflation is also decidedly lacklustre, given that the balance of those who said prices had risen compared to those claiming they had dropped was actually seven per cent.
It seems that global market conditions are at least partially responsible, with 39 per cent saying that political and economic conditions overseas are expected to restrict the number of export orders that will come in over the next three months.
“We need to continue to help manufacturers to export their products to high-growth markets across the globe, to give a healthy and sustainable boost to the UK’s recovery,” says CBI deputy director-general Katja Hall.
So manufacturing is firmly back on its feet, the study shows, but it is domestic rather than foreign demand that is driving the recovery. Some 42 per cent of manufacturers said they expected total new orders to rise in the coming quarter, while just eight per cent were anticipating a decline.
Whatever is fuelling the expansion, it appears it will be a good opportunity to benefit from job creation and wider investment – a balance of +11 per cent predicted employment would increase in the next three months. Moreover, the balance of firms saying they planned to invest more in the next year was +32 per cent – the highest figure since October 1989. Either way, it seems the manufacturing industry is going from strength to strength.
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