BCC survey reveals manufacturing bounce back

Shrugging off recent signs of a slowdown, the manufacturing sector recorded increases in the balances for domestic sales (+36%, up from +23% in Q3), export sales (+26%, up from +16%), recruitment intentions (+85%, up from +73%) and turnover confidence (+62%, up from +60%). The survey, made up of responses from almost 7,000 businesses, also showed that firms set out to recruit staff at an all-time high rate in the last three months of 2014. BCC's director general, John Longworth (pictured), said that firms' strong performance at the end of 2014 could translate to a strong year of growth in 2015 – but this will depend on unwavering support for business throughout the general election and beyond. The survey revealed that the balance of manufacturing firms operating at full capacity rose by one point to +41% in Q4, while a record number of manufacturers invested in training in Q4 (+39%, up from +32% in Q3) and a historically high proportion invested in plant and machinery (+36%, up from +29% in Q3). Longworth said: "British businesses are well placed to grow in 2015 – a testament to their hard-work and resilience. It is particularly pleasing to see the manufacturing sector bounce back, despite signs of a slowdown in recent months. However we must aim for growth that is sustainable for the long-term, rather than settle for second best" He added: "With employment and investment intentions at historically high levels, businesses are gearing up for a big year in 2015. It is now vitally important that firms are able to convert their growth ambitions into reality. Strengthening our business finance system, which constrains the growth aspirations of too many firms, will remain a decisive factor in securing a sustainable recovery. Low interest rates and reduced regulation will also go a long way to creating an environment that encourages enterprise and wealth creation." However, he warned, despite an improvement in export balances, the UK's lacklustre export performance and severely adverse current account balance continued to act as drag anchors on GDP growth. "This need not remain the case - lack of growth finance, patchy help on the ground in overseas markets, and a never-ending churn of short-term support schemes must be addressed without delay." Tom Lawton, head of manufacturing at business adviser BDO LLP, added: "The latest figures from the BCC are encouraging, especially where they indicate growth in the extremely important export markets. However, there is conflicting data out there so this is no time for complacency. "The Government should view this as an opportunity to get behind the manufacturing sector and do everything it can to build momentum by encouraging investment and employment in the sector and by enhancing the support provided to companies that export or are looking to export. This is particularly important now given the signs that the UK's dominant service sector is faltering, highlighting the need to bring more balance to the country's economy."