British Manufacturers Continue To Recover

CBI Confirms That British Manufacturers Performed Well In February 2014

24.02.2014

Fergal Dowling, Partner | +44 (0)121 214 5476

The future appears to be bright for manufacturing companies of all sizes in the UK, as the Confederation of British Industry's (CBI's) latest report highlighted another upturn in growth in February 2014.

According to the CBI Industrial Trends Survey, export orders bounced back this month, following a slight dip in January.

Although the overall growth of order books was down on figures recorded in November and December, manufacturing output remained strong.

The survey covered 380 businesses and it was found that motor vehicle makers have been a leading factor behind the manufacturing industry's recent recovery. Indeed, export orders in February in this particular segment grew at their fastest rate since October 2011.

A positive balance of 24 per cent of companies said their productivity levels have been above the norm this month, while a rounded balance of +28 per cent expect activity to increase over the next three months.

CBI head of economic analysis Anna Leach suggested consumer demand has improved in recent months.

"Growth is increasingly broad-based and firms' growth expectations are the highest for several months," she commented.

"As the UK and global economies continue to strengthen over the coming months, we expect conditions to continue to improve for UK manufacturers and to increasingly feed through to business investment."

The CBI figures support the findings from the most recent Markit/Chartered Institute of Purchasing and Supply, which showed Britain's manufacturing sector made a positive start to the year and recent levels of growth have been at near 22-year highs.

Although the economy has strengthened in the past six months and banks have started to lend money to small businesses more freely, manufacturers are still urging the government to introduce measures aimed at stimulating growth.

In a recent speech in Hong Kong, chancellor George Osborne dropped several hints that manufacturers will benefit from the terms laid out in next month's Budget delivery.

He said the UK cannot rely on the City of London for growth and the country needs a more balanced economy.

Expert Opinion
The manufacturing sector is central to the UK’s economy and I’m pleased to see this upturn in output following a slight dip in January.

“SMEs have played an important role in this increase and it is vital that we continue to support them as they expand and create more jobs within the economy.

“In order to build on this strong start, we must get behind the sector and give small and medium-sized firms the support they need - whether that be access to finance, advice on exporting, reducing unnecessary red tape, or ensuring that they receive first class professional advice.”

Fergal Dowling, Partner