Confidence high for year ahead

Posted on 1 Dec 2009 by The Manufacturer

UK manufacturers are the most confident business collective across Europe for prospects over the coming year, according to accountants KPMG.

The UK manufacturing findings of KPMG’s latest Global Business Outlook Survey show:
o Manufacturing capacity utilisation is expected to grow robustly in 2010

o Capital expenditure and research and development are both forecast to rise for the first time since the start of 2008

o UK employment projections are better than most as they expect them to rise modestly in the coming year compared to most European countries which expect their employment levels to fall.

o Input and output prices are set to rise; while costs are set to grow faster than charges in manufacturing. Correspondingly profits are set to grow slower than revenues.

“The confident numbers posted by UK manufacturers come as currency issues mean that the rebound here will be sharper than that experienced in the euro-zone. I believe this signals a 12-18 month window of opportunity for UK manufacturers to steal a march on their continental competitors,” said Gautam Dalal, head of diversified industrials, KPMG in the UK.
“As the UK companies look to capitalise by increasing their own capacity utilisation, it will be interesting to see whether elements of their supply chains are brought back from overseas locations. This is a crucial time insofar as decisions may soon be made about whether to come back all the way to the UK – or only as far as the euro-zone. The extent to which regional development aid is made available to facilitate this move may go a long way to determining what that final location is.”

KPMG’s research is conducted by Markit Economics.