Though the worst of the recession is now confined to history manufacturers still face a rocky road to recovery according to the latest survey by EEF in conjunction with BDO Stoy Hayward.
Introducing the Engineering Outlook report for quarter three, the two organisations described recovery prospects next year as ‘anaemic’ despite manufacturers reporting better cashflow and fewer firms now facing falls in output and orders. This is because those firms still do not plan to increase capital expenditure and are still cutting staff, albeit at a slower rate. Tight credit conditions and market uncertainty were touted as reasons for negative intentions.
“Manufacturers are telling us that output is starting to stabilise but there is little sign of confidence coming back,” said Steve Radley, EEF chief economist. “The government has a key role to play in ensuring these problems don’t prevent companies from making the investments needed to take advantage of the recovery when it comes.”
Overall, EEF and BDO expect manufacturing growth of 0.5 per cent next year following a 10.5 per cent decline in 2009.
The Engineering Outlook report is available from eef.org.uk.