Manufacturing outlook positive for next quarter

Posted on 4 Mar 2008 by The Manufacturer

The latest EEF/Grant Thornton sector survey has recorded hopeful results for the first quarter of the year, with manufacturers maintaining optimism for the ensuing three months despite the rocky economy.

Though output and order balances are shown to be weaker than at the end of 2007, they are still above long-term average – 14 per cent of respondents said their orders had increased compared to 21 per cent for the previous quarter.

Factory gate inflation is still occurring according to official statistics, but the survey suggests pricing intentions are remaining relatively quiet.

The survey shows manufacturers to be positive about the next quarter, with increasingly firm investment intentions and workforces more likely to expand than contract.

“While manufacturing is this decade’s true economic comeback kid, the sector is not completely immune to the inflationary pressures and weakening consumer spending that are already impacting on other sectors,” said Bob Hale, Grant Thornton’s head of manufacturing.

“Manufacturers should give greater weight to defensive investment in the coming 12 months, with capital directed at reducing energy usage and improving production line efficiency to counter the challenge of the rising cost of raw materials,” he added.