13 April 2017

UK manufacturing sector reports strong export growth

The UK manufacturing sector is reporting solid growth, with increases in domestic and export sales since the previous quarter, according to the British Chamber of Commerce (BCC).

It’s Quarterly Economic Survey, which is based on responses from more than 7,300 businesses (manufacturing and services sector) in Q1 of 2017, shows the manufacturing sector performing strongly, particularly in the exports market.

The balance for manufacturing sector firms reporting increased domestic sales rose from +15% to +20%, and orders rose from +7% to +16%. Meanwhile, the balance of firms reporting improved export sales rose from +16% to +26%, and the balance of export orders also increased from +13% to +22%.

However, the BCC warned that the rising cost of overheads and raw materials are presenting as a risk to growth in the medium term. More than three quarters (76%) of manufacturers reported an increase in the price of raw materials (up from 65%), and 38% of manufacturers reported an increase in the cost of other overheads (up from 23%).

In addition, the percentage balance of manufacturing firms expecting the price of their goods to increase over the next three months remains at historic highs, despite falling slightly from last quarter from +52% to +47%.

Other findings show the percentage of manufacturers trying to recruit grew in the last quarter – standing at 86%. However, the sector also continued to experience high levels of recruitment difficulties - standing at 74%

But, confidence remained steady in Q1. The balance of manufacturers confident that turnover would improve over the next 12 months rose from +43% to +44%, and the balance of manufacturing firms confident that profitability would increase rose from +22% to +32%.

Dr Adam Marshall, director general of the BCC, said: “In the here and now, many businesses are resilient and experiencing solid growth. Many firms tell us their short-term expectations are strong, but that the medium-term picture is far from clear.

“While manufacturers have enjoyed a good quarter, they are facing higher costs at the factory gates, which increasingly translates into companies having to raise their own prices. With inflation already above the Bank of England’s target, this squeeze on firms looks set to continue in the medium term."

He continued: “Businesses also continue to report recruitment difficulties, and while we’d like to see greater investment in training across the board, without access to a sufficient talent pool, companies are restricted in their development ambitions.”

Author
Adam Offord

Supporting Information

This material is protected by MA Business copyright
See Terms and Conditions.
One-off usage is permitted but bulk copying is not.
For multiple copies contact the sales team.

Do you have any comments about this article?

Add your comments

Name

 
Email

 
Comments
 

Your comments/feedback may be edited prior to publishing. Not all entries will be published.
Please view our Terms and Conditions before leaving a comment.

Related Articles

Manufacturing output picks up

Manufacturing order books improved on April, and output growth accelerated in ...

UK Steel manifesto calls

The next government needs to maintain seamless trade between the UK and the ...

Labour launches manifesto

Labour has launched its manifesto.

Lines of credit

Most people care little for money except counting their own. But in business it ...

Tis the season to be jolly...

Are you about to receive a visit from the ghost of manufacturing yet to come? ...

Cheque mate

Banks have been all flattery as they try to woo back manufacturers who walked ...

Rebalancing the Economy

Leading academics have criticised government "empty rhetoric" around ...

Goplasticpallets.com sales

The appointment of Tom Lee (pictured) as project sales manager marks a period ...

Investing in the future

Supporting Manufacturing & Engineering North East will enable his company to ...

Cameron interview

David Cameron tells us why his love for engineering is the real deal and how ...

Stepping up to the Mark

Manufacturers say the job market is saturated with a generation of the ...

Out of the Maier

Lacklustre investment in plant will soon bring UK manufacturing growth to a ...