EEF confirms positive manufacturing outlook

It has reported steady growth gains, but also greater economic uncertainty in a major survey of senior executives conducted with Aldermore Bank. The EEF said: "The survey of 200 senior executives paints a more positive outlook than the muted picture of 12 months ago, with growth expected in all markets and across all sectors and sizes of companies. The relentless pursuit of growth opportunities in new markets, sectors and technologies looks set to be more focused for firms in 2014, but they are far from certain that risks to growth won't return this year." EEF chief executive Terry Scuoler said: "Manufacturers are telling us they expect to make a greater contribution to growth, investment and jobs this year. Innovation, energy and diversifying into new supply chain remain key opportunities but the UK and the Euro-zone are also looking better. "However, global uncertainty and rising energy costs pose significant risks and, the challenge for industry and government this year will be to get industry's investment plans over the line." The survey reveals that actions to improve productivity, greater supply chain collaboration, strong communication with employees and increased overseas marketing efforts will top the list of strategies for manufacturers in the year ahead. Almost three-quarters (70%) of companies expect the UK economy to improve in the next year, with 62% expecting manufacturing prospects to improve. This is mirrored in the outlook for the global economy where 57% of companies expect an improvement. However, the perception of global risk is highlighted by the fact just 3% of companies expect this improvement to be significant. Two thirds of companies expect their domestic sales to increase and 55% expect their exports to increase. The extent of the importance of emerging markets is underlined by the fact increased demand from these areas has returned with two fifths of companies viewing this as the best source of growth. Companies in the transport sectors were most positive about emerging market demand reflecting the prospects for goods such as luxury vehicles and civil aircraft where the UK is well placed. However, the impact of the prolonged downturn on manufacturers is also highlighted. Three quarters believe 'economic uncertainty is the new norm'. Specific risks include rising input costs. The EEF said: "This reflects the impact of rising energy costs in particular although pay pressures, a factor not seen for many years, were also identified as a risk by a quarter of companies."