43% of firms believe Brexit to have positive impact on economy

The Lloyds Bank Commercial Banking’s Manufacturing Barometer, which questions more than 240 manufacturers, found that half (52%) of firms in the sector expect to increase staff numbers.

The industry, which employs more than 2.6 million people, is more optimistic about its hiring intentions than other major sectors, ahead of construction (49% of companies expecting to create jobs), financial services (47%) and retail (34%).

Manufacturers also reported that wages are set to increase, with 84% planning to award pay rises over the coming year.

The research suggests that businesses are ramping up staff numbers in anticipation of increased workload with half (47%) expecting a rise in business activity.

This optimism was reflected across the sector more widely as 52% said they felt more positive about the UK economy than this time last year, compared to 19% who said they were more pessimistic. And four in ten (43%) said Britain’s exit from the EU would have a positive impact on their business.

Confidence in sector remains robust 

The Barometer suggests confidence in the sector remains robust following an upbeat reading of 55.1 – with anything above 50 signifying growth – in March’s IHS Markit/CIPS manufacturing PMI.

Dave Atkinson, UK head of manufacturing at Lloyds Bank Commercial Banking, said: “The data reflects a sector set for further expansion, something reflected in the optimism and ambition to create new jobs.

“Taken alongside the most recent PMI, our survey shows that manufacturing continues to outperform the wider UK economy and is a true engine of growth.

“The evidence is that manufacturers are investing into new markets and research and development. Encouragingly, export levels also seem to be robust, even as the pound has strengthened since the start of the year, suggesting that overseas trade levels haven’t been predicated solely on weaker sterling.”

Lloyds Bank is one of the leading supporters of the UK’s manufacturing sector. Between 2013 and 2017 it provided £4bn of funding to manufacturers as part of its commitment to Helping Britain Prosper.