Economic survey reveals slow recovery for manufacturing

Data was collected from 5,500 businesses and the results displayed as a percentage balance. While the service sector showed improvement the findings for manufacturing made grim reading. The number of manufacturers looking to hire staff fell a steep 19% points to settle at minus 16% over the quarter while employment expectations also fell 1% point to minus 2%. Investment took a similarly negative turn with fewer manufacturing firms reporting plans to increase expenditure on plant and machinery; the balance fell 4% points to minus 6% while intentions to train staff alson declined 6% points to 1%. The number of manufacturers firms reporting operating at full capacity moved down 2% points, to 30%. They also stated that they felt less pressure to raise prices over the quarter, the balance fell 2% points to 8%. Encouraging news for the manufacturing industry came from the export balance over the quarter; benefiting from both the end of destocking cycle as well as a weaker pound, manufacturers have maintained their competitiveness over the past three months. Figures indicate that improvements from quarter four in 2009 consolidated and the export deliveries balance remained steady at 20% over the first quarter while export orders climbed 4% points to 21%. Despite the slump in critical factors for future growth, investment and cashflow, the number of manufacturers reporting confidence in profitability moved up 5% points to settle at 22% demonstrating their post-recession resilience. BCC director general David Frost (pictured), said: "Businesses are showing resilience despite difficult and uncertain trading conditions. Confidence is building, and the Government must nurture this with well-thought out policies that support business growth and job creation. Special attention must be paid to bolstering our exports in goods and services, which will help rebalance the economy away from an over-reliance on debt and the public sector." However commenting on the sharp decline in investment from the manufacturing sector, BCC chief economist David Kern stressed: "Unless the sharp declines in capital investment are reversed, the UK's productivity will plummet further and the economy will lack the capacity to meet growing demand when the recovery gains momentum."