Manufacturers in the North West are ending the year with plenty of festive cheer as they enjoy positive conditions across most economic indicators, according to a closely watched survey published today by EEF, the manufacturers’ organisation and accountancy and business advisory firm BDO LLP.

The Manufacturing Outlook survey for the fourth quarter shows output across the region increased significantly to a historic high with a balance of +50% of companies saying their output increased, the joint highest of any UK region.

This was matched by overall orders which also picked up significantly to a historic high of +47%, reflecting the national picture of a sector benefitting from increasing demand from Europe and other growing markets around the world. This picture is expected to gain momentum in the coming months.

This strong performance and the need for extra capacity has boosted recruitment amongst firms in the North West, with recruitment intentions the highest for three years at 39%. This is driving firms’ investment intentions which have also picked up to +24%.

The mood of optimism amongst North West manufacturers has boosted business confidence which has picked up for the second consecutive quarter as firms approach the New Year.

As a result of the strong conditions for manufacturing through 2017 and the positive outlook for 2018 EEF has upgraded its forecasts for the sector to +2.1% and 1.4% respectively. This is faster than the UK economy overall where, in line with the OBR forecasts at the Budget, EEF expected tepid UK growth of 1.5% in 2017 and 1.3% in 2018.

Commenting, Richard Halstead, Director of Member Engagement for EEF in the North, said:

“Stronger global growth has cemented the foundations for growth in manufacturing this year, but the sector’s contribution to the UK economy has been greater than most expected. Not only have we seen consistently positive survey responses in each quarter this year, but growth has been evident across all industry segments and UK regions in 2017.

“There is some confidence that this momentum will carry into 2018, but as we head towards the Brexit end game we need manufacturing to produce the same trick of broad based growth again next year. As we see more companies investing and capitalising on global growth, we’ve become more upbeat in our forecasts for the growth outlook. Government’s industrial strategy is now out of the starting blocks but it needs to maintain a steady pace on delivery of its policy commitments to anchor manufacturers’ growth and investment in the year ahead.”  

Graham Ellis, Director and Head of Manufacturing at BDO in the North West, said:

“Manufacturers in the North West have continued their strong performance into the final quarter of 2017, ending the year with plenty of festive cheer. The sector’s performance is being driven by increasing demand from around the world, in particular Europe. The task of government is very clear: it needs to deliver a Brexit that minimises disruption to manufacturers – they are the economic engine of the UK economy.

“It is encouraging for manufacturers to now see further detail of the Government’s long-awaited Industrial Strategy. However, it is critical that the Government commits to the strategy over the long term (15 to 20 years), avoiding the disruptions of political cycles and encouraging manufacturers to commit to significant capital investments to boost growth and productivity.”