New products and markets raise manufacturer's hopes for 2013 says EEF

The survey suggests that while trading conditions will remain challenging in 2013, Britain's manufacturers have positioned themselves to secure growth in the year ahead by competing with new technologies and products and by continuing to focus on higher growth markets. Even though 2012 saw output decline for the first time since 2009, manufacturers are less downbeat about the prospects for the year head with bosses indicating a 'steady as she goes' outlook. Commenting on the survey, EEF chief executive Terry Scuoler (pictured) said that recent increases in investment in innovation in recent years would bear fruit as companies saw opportunities from new product development and the commercialisation of new technology. "These efforts will provide a platform for UK exporters to compete in faster growing markets and support efforts to diversify into new global supply chains," he continued. "There is, however, no getting away from the clouds that linger on the horizon. While the risk of a break up in the eurozone has diminished, conditions remain difficult, leading to continued caution in business planning. At the same time, concerns around the wider global demand picture have grown amongst manufacturers." According to the survey, the same proportion of respondents expect a deterioration as forecast an improvement in trading conditions for manufacturing in 2013; an improvement on 2012 when pessimists outnumbered optimists. No longer so concerned about the risk of raw material price inflation, most manufacturers now see a slowdown in the world economy as the biggest risk to growth. Risks from exchange rate volatility have also moved up the manufacturing agenda while smaller companies continue to be concerned about their ability to access external finance. Companies in the metals sector are the most negative about growth prospects, along with mechanical equipment. By contrast, the transport sector in particular is forecasting a moderate improvement. Other transport, which includes aerospace, has posted continuous year-on-year growth for most of the past decade and this trend should continue through 2013. Companies in the rubber, plastics and chemicals sectors are also, on balance, predicting a pick-up in trading conditions in 2013.