Sector maintains growth in face of input price pressure says EEF survey
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The UK manufacturing sector has maintained its strong growth although concerns are emerging about volatility on costs as margins and cashflow come under pressure according to EEF data.
The second quarter's EEF/BDO 'Manufacturing Outlook' survey show that manufacturing has expanded in six consecutive quarters and points to growth in the second half of the year and on into 2012.
Positive investment and recruitment intentions signal a gradual increase in confidence, says the report, but companies may struggle to pass on cost increases
The survey shows output and orders to have been strong in the last quarter and following a jump in the number of vacancies in manufacturing with companies across the country continuing to recruit over the past three months.
Over the last six months, when the economy as a whole stagnated, manufacturing grew by 2.3% and since the recovery began, despite only accounting for around 13% of the economy, the industry has been responsible for one third of economic growth.
EEF chief economist, Lee Hopley (pictured), said that although recent data appeared to indicate that manufacturing may be heading for more turbulent times, this new survey continued to show underlying strength. She went on: "Providing buoyant demand from overseas markets holds firm, we should see growth maintained through the rest of the year.
"However, the flipside of strong global demand has been upward pressure on a range of input and commodity prices, which has become tougher to manage. But manufacturers' plans to invest for future growth suggest there is some confidence that they will be able to navigate this and other challenges in the months ahead."
