Britain’s increasingly bullish manufacturers expect the industry to outpace the rest of the economy this year, according to a new study, in the latest sign that Britain’s factories are booming despite weaker growth in both Europe and the United States.
Companies in the manufacturing industry have raised their 2014 growth forecast for the sector to 3.6 per cent, trade body EEF announced today – a major jump from the 2.7 per cent predicted nearly three months ago and higher than the 3 per cent growth expected for the economy as a whole.
The study – one of a number of positive economic indicators released today – comes ahead of official data tomorrow which economists expect will show manufacturers in April enjoyed a fifth straight month of increasing production.
“Now that manufacturers have been freed from the shackles of recession, they are proving their importance to the UK economy by leading it out of the downturn,” said Tom Lawton at accountants BDO, which compiled the survey with EEF. “The motor industry is showing particular strength but the most encouraging aspect of this recovery is that it is so robust that all sub-sectors are showing an increase in output.”
However, the EEF did caution over exports, which have been hampered by a strong pound as well as growing concerns over Europe and the US. “While we see a lot of activity from companies looking to secure new export business, the still uncertain outlook in some parts of the global economy means a turnaround in exporting fortunes in the short term is not guaranteed,” said EEF chief economist Lee Hopley.
Nonetheless, the news will be a boost for David Cameron. The Prime Minister was today opening the International Festival of Business in Liverpool, a 50-day event that the Government hopes will encourage foreign investment in the UK.
“This government wants to work on behalf of every business in Britain to drum up trade, encourage investment and pave the way for growth,” he is expected to say.
A separate survey released today by EY showed the UK kept its position last year as Europe’s top destination for investors from around the world. The UK secured 799 inward investment projects in 2013, the accounting giant said, 15 per cent up on 2012.
In other positive economic news, nearly 90 per cent of fund managers in the City now expect an improvement in the UK economy in the next 12 months, spreadbetting firm Capital Spreads announced – an increase of 5 per cent from three months ago.
In addition, Britain’s management consultancy sector was today revealed to have enjoyed its strongest growth since the start of the financial crisis. The sector, one of the worst hit by the downturn, grew by 8 per cent in 2013 according to the Management Consultancies Association (MCA), the biggest increase since 2007.