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EEF report reveals strong turnaround in North East manufacturing

Manufacturing in the North East has seen a marked turnaround since the lows of late 2015 and much of last year, according to a new report.

Released today, the Regional Manufacturing Outlook from industry’ organisation EEF draws in survey data and the latest ONS figures to provide a longer-term and in-depth picture of the health of UK manufacturing.

The second quarter of this year saw a surge in the North East’s output and order balances, meaning manufacturing now accounts for 14.8% of the region’s total output.

The number of manufacturing companies in the North East increased by 3.9% to 4,235 businesses, the fastest growth in enterprises in any region. While manufacturing employment has remained flat since 2010, manufacturing accounts for 9.6% of the region’s total workforce.

Confidence too is up. Just prior to Brexit, confidence levels sat at 5.9 out of ten, but this has risen to 6.2, making the North East the most improved in the confidence ratings. Much of the positive news and growth is due to the pick-up in the mechanical equipment and metal industries.

The region continues to rely heavily on the EU for its export market, with 62% of all exports from the North East destined for Europe.

Liz Mayes, North East Region Director at EEF, commented: “Positive trends in UK manufacturing are being reflected here in the North East and confidence within the sector across the region is growing.

“The pick-up in the mechanical equipment and metals industries has driven growth and UK orders have increased over the year, which has improved confidence.

“Uncertainty around the UK’s future relationship with the EU could be hampering recruitment, but overall the outlook is extremely positive and investment intentions in our region are the strongest in the UK over the past 12 months.”

Craig Burton, Partner and Head of Manufacturing at BDO in the North East, said: “The North East has seen a strong performance and turnaround over the last year and this is clearly reflected in its 4th place confidence ranking and increasing manufacturing output and orders.

“However to ensure continued growth, we need the Government to deliver a long-term, practical Industrial Strategy for the UK and the Regions - with a focus on the mid-market and investing in education, skills and in the North East infrastructure.

“From better roads, rail links to reliable broadband connections and support for Industry 4.0, the Government needs to help create the right environment for North East manufacturers’ to continue to be successful in what will undoubtedly be challenging times in the short and medium term.”

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