Manufacturing Optimism 'At Its Highest Since 1973'

Confidence Is "Rapidly Rising", New CBI Report Says

25.04.2014

Steven Beahan, Partner | +44 (0)114 294 7868

Confidence levels among Britain's manufacturers have not been as high as they were in the first quarter of 2014 since 1973.

This is the standout finding from the Confederation of British Industry's (CBI's) latest Industrial Trends Survey. It also showed that growth in total order books and domestic orders grew at the fastest pace since 1995.

The report adds yet more weight to suggestions that Britain's economic recovery is gathering momentum and manufacturers - both large and small - are predicting further robust growth in the coming months.

Covering 405 companies, the CBI survey revealed the number of firms looking to invest money into new plant and machinery is at its highest point for 17 years, while employment growth was at its strongest since October 2011 in the first three months of this year.

CBI chief policy director Katja Hall said confidence is "rapidly rising" throughout the nation's manufacturing sector.

"Our industrial base is seizing a bigger role in the UK’s economic recovery, with output, orders and hiring all on the up," she commented.

"There are still bumps in the road ahead, with only a tepid recovery likely in the eurozone, the pound creeping higher and a rapidly evolving situation in Ukraine. However, expectations for growth in the coming three months are positive."

Recent reports have confirmed that Britain's resurgence in the past 12 months or so has been primarily driven by the domestic market, with firms still finding it difficult to increase their export activity.

However, the CBI study indicated that perceived barriers that are restricting businesses - particularly SMEs - from trading overseas are steadily being broken down.

The number of companies that see political or economic conditions as major constraints on their ability to export services fell to just 22 per cent in the first quarter of 2014 - the fourth consecutive month that this figure has dropped.

Expert Opinion
We are seeing greater confidence amongst UK manufacturers and it is clear that SMEs are playing their part in rebalancing the economy and supporting the Government’s objective for the UK to be recognised as a nation of ‘makers’.

“The most recent EEF report said that it expected the manufacturing sector to grow by 2.7% during 2014 and it is vital that businesses get the support they require. Many companies are still too reliant on the domestic market and although firms think that barriers to overseas trade are less problematic than before, it is important that we as a nation export more of our goods.

“We have huge potential in the UK and a strong entrepreneurial spirit, but SMEs require timely support to ensure they are able to deal effectively with the many issues associated with international expansion.”
Steven Beahan, Partner