Member Article

Manufacturing sector shows signs of resilience

The North East manufacturing sector is showing signs of resilience, despite the double-dip recession.

Before the economy returned to negative growth, many manufacturers had taken active steps to preserve cash, manage commodity and staff costs and streamline their business in order to survive.

Now the sector, which employs 109,000 people in the North East is much better equipped to deal with future shocks.

Simon Manning, manufacturing partner at Deloitte in the North East said: “Manufacturing firms across the North East have been faced with many hard decisions over recent years but in the absence of strong growth in the wider economy they have had little option other than to cut costs

Across the UK, the number of manufacturing firms entering administration has fallen to 102 in the first quarter of 2012, 17 fewer than the year before. This comes despite recent Government statistics indicating that manufacturing output fell by 0.9% in March compared with the year before.

The Eurozone currently accounts for £5 billion in North East exports, and the ongoing uncertainty coupled with weak domestic demand and increased energy prices have forced manufacturers to take defensive steps.

Manning added: “The latest manufacturing administration figures show the steps taken by sector have made it better placed to survive a downturn in the economy and although conditions are unlikely to improve in the near future these streamlined firms will be well placed to take advantage of the upturn when demand returns.”

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