Member Article

Yorkshire manufacturers power on despite uncertainty in the Eurozone

Manufacturers in Yorkshire have reported positives across every key indicator of business health and outperforming the UK average.

The latest quarterly Manufacturing Outlook survey by EEF, the manufacturers’ organisation, and accountancy and business advisory firm, BDO LLP reveals that despite a more difficult trading environment overseas business confidence in Yorkshire has firmly taken root, with this quarter’s findings showing that manufacturers’ strong first half of the year is being sustained in the third quarter.

A balance of 32% of manufacturers in Yorkshire are reporting an increase in output in Q3 (compared to UK average of 10%), with a further 27% seeing growth in order books and a balance of 33% looking to recruit.

One area of caution is in exports, resulting in EEF issuing a warning that the demand picture is now more uncertain than for some time.

With the Eurozone economy flagging significantly, political risks increasing and a stronger Sterling exchange rate, export orders UK-wide are turning negative for the first time since the start of 2013.

Andy Tuscher, Yorkshire and Humber region director at EEF, says: “Growth in manufacturing remains positive in Yorkshire, although it is understandably starting to return to more moderate and sustainable levels as the pent-up demand which built up during the recession begins to expire.

“However, there are clearly risks overseas which could threaten the pattern of growth going forward. In the face of this, while politicians may be focused on next year’s election it is critical that efforts over the rest of this parliament remain focused on sustaining growth across manufacturing and the economy.”

Jason Whitworth, partner and head of manufacturing at BDO in Yorkshire, added: “The results come as welcome news to our regional economy and jobs market.

“There is nervousness surrounding overseas market, so a strong recovery in exports this year is still uncertain. I would urge companies to avoid using this as an incentive to focus investment on domestic markets, as this is not where long term sustainable growth will lie.”

The EEF/BDO Manufacturing Outlook survey shows that most sub sectors reported an increase in output with motor vehicles and non-metallic minerals especially strong performers.

Rubber and plastics manufacturers were the most upbeat with a balance of +80% of companies increasing output in the past three months. Electronics was the only sector to report falling output.

Nationally, EEF is continuing to forecast strong manufacturing growth at 3.3%, with a return to more normal long-term growth of 2.1% in 2015. Other key findings across the UK are:

Output and orders balances positive, but down from last quarter whilst the domestic market remains the driver of output growth.

This was posted in Bdaily's Members' News section by Clare Burnett .