Output in UK manufacturing rises as Eurozone falls

The UK manufacturing optimism index from business advisers BDO Stoy Hayward is derived from the results of all the UK’s main business surveys carried out during the last month. On a scale where the mean is 100 and the average of the past two cyclical peaks is 110 and the average of the past two cyclical troughs is 90, the new index figure for April stands at 86.4 – up 4.3 points from January. Based on equivalent European business surveys, manufacturing optimism in France, at 89.7, and in Italy, at 93.8 were both unchanged between January and April while German manufacturing recorded its first increase for two quarters with a reading of 87.1, a 3.9 point increase from January. BDO’s manufacturing output index, a measure of order book strength and short-run turnover expectations one quarter ahead, stood at 83.6 points in April – a 0.6 point increase from January’s 83.0. The output index, however, paints a gloomy picture for manufacturing in the Eurozone with the manufacturing output index declining over the quarter, albeit at a much slower rate than previously. Impacted by a strong Euro, which led to less competitive prices in the Eurozone, the BDO manufacturing Euro area output index fell to 84.5 in April from 85.1 in January, a modest decline compared to the 7.9 point fall from October to January. BDO manufacturing sector specialist Kim Stubbs (pictured) said: “Until now, confidence in UK manufacturing this year has been in freefall and despite conditions in the labour market being likely to worsen in the coming months, some manufacturing businesses are starting to view the future with less trepidation. The indicators also suggest that the combination of government initiatives are beginning to kick-in and the pressure that has been applied on banks to increase their lending is beginning to take shape.”