Britain’s manufacturers fear that the eurozone crisis is seriously jeopardising trade with Europe and are focusing more on exports to non-traditional markets.
A survey by manufacturer’s organisation EEF shows the outlook for the economy in the year ahead comes with a high degree of uncertainty. The main challenges stem from the unresolved eurozone crisis and its negative affect on access to finance and the ability of other markets to shake off the effects of recession.
Whilst two thirds of executives have already adjusted their company business plans in response to the growing global economic uncertainty, firms are hunting out new, global markets for their products and services to take advantage of growth opportunities.
Of these almost half saw greater opportunities in both products and services in more than one non traditional market. This comes on the back of a 20% year on year increase in exports to non-EU markets to October 2011.
EEF Chief Economist, Ms Lee Hopley, said: “If we can navigate these hurdles, manufacturing should again play a role in delivering the balanced growth our economy needs.”
Despite the confidence around firm level performance, the report also highlights risks to growth plans.
According to the survey the greatest risk to manufacturers’ prospects in 2012 comes from raw materials shortages with 80% of executives reporting this as a concern.
Concerns that growing pressure in supply chains and shortages or stretched lead times of some raw materials could impact on production are cited as a top risk to growth by two-thirds of executives. And inevitably the events in Europe and potential knock-on consequences on the UK and on the provision of finance are seen as major risk by two-fifths of companies.
However, executives’ upbeat assessments of their own prospects are matched by positive attitudes to the UK as competitive location for manufacturing in the year ahead.
The survey was conducted in December with 204 companies responding.