A report on manufacturing performance published by EEF and Grant Thornton has proved confidence-inspiring for the year ahead, with the UK sector seen to be “something of a beacon in the dark” (Bob Hale, Grant Thornton’s head of manufacturing).
The report shows that the sector has enjoyed much success, with 2007 seeing its best performance in a decade. Measures adopted to increase competitiveness have proved fruitful, with many companies choosing to focus their efforts in design, development and service provision in order to gain advantage.
Also identified were an especially large increase in output for the automotive sector, resulting from new model launches and consumer demand; the strongest investment intentions since 1995; seven out of ten companies expecting to retain their UK base, despite operations increasingly moving overseas; an increase in the balance of companies reporting improving profitability from -4 per cent in 2003 to 34 per cent in 2007; and the best conditions for manufacturing in 10 years, due to rising output levels and improving employment figures.
“Manufacturers continued to record healthy growth last year despite a more challenging environment with oil prices rising and the dollar weakening,” commented EEF chief economist Steve Radley. “With fears of a recession in the United States and turbulence in financial markets, the economic backdrop is likely to become less favourable and growth in manufacturing is slower. However, manufacturing’s new resilience will leave it much better placed to cope with whatever the economy throws at it this year.”