Manufacturing growth to outpace wider UK economy

Posted on 9 Jun 2014 by Callum Bentley

UK manufacturing is predicted to grow at a higher rate than the rest of the UK economy on the back of further growing confidence across the sector, according to the latest EEF quarterly survey.

Businesses in the sector expect to grow as much as 3.6% this year, up from the previous estimate of 2.7%, according to the survey by EEF and accounting firm BDO. The figure is significantly ahead of the wider UK economy, which is expected to grow by 3pc this year.

Its survey of 275 firms, done during April and May, found a balance of 34% of manufacturers expected their output growth to improve in the next quarter.

The survey also showed manufacturers were willing to invest further and focus on further employment as a result of the confidence boost.

“There is a definite sense of confidence amongst manufacturers. This should help sustain broad based growth across the UK,” said EEF chief economist Lee Hopley.

However, Ms Hopley warned that the sector was too reliant on strong domestic demand, as the growth in export orders slowed due to weaker-than-expected growth in the eurozone and the US, and the strength of sterling.


She said: “While we see a lot of activity from companies looking to secure new export business, the still uncertain outlook in some parts of the global economy means a turnaround in exporting fortunes in the short term is not guaranteed.”

Tom Lawton, head of manufacturing at BDO, added: “What is now needed is a focus on how this success in the UK can be replicated abroad, and we would encourage the Government to introduce more measures to support exports, especially given the tentative nature of economic recovery in Europe.”