UK manufacturing confidence higher than China’s
1 min read
The UK's manufacturing sector has maintained the relatively healthy outlook it had in the spring and is more optimistic than both the global average and the UK service sector, according to a global business outlook survey, released today.
The survey, compiled by research firm Markit on behalf of business advisors KPMG, found that 64 percent in the UK manufacturing sector expect a rise in business activity during the next 12 months (against 8 percent anticipating a drop). In fact the sector in the UK has higher hopes of the year's prospects than manufacturers in most global economies, including China. Only Brazil, the USA and India are more optimistic.
However, expectations have broadly plateaued, with slightly fewer manufacturers now expecting growth in revenue, new orders and profits making a rise in the balance of manufacturers expecting to increase employment all the more notable and surprising.
UK manufacturing's capital and R&D investment intentions also remain positive but have fallen back slightly; maybe due to difficulty in making investment decisions in the face of continuing economic uncertainty. However, the global trend shows most manufacturing operations planning to increase such spending.
KPMG's Gautam Dalal commented: "Across the UK manufacturing sector, it feels that we are experiencing a progressive recovery; something which is shallow but sustainable and with the fears of a double dip recession beginning to fade into the background. With most of the survey indicators levelling off, it is interesting that optimism is actually increasing around the prospects for employment. Of course, it's impossible to make out whether this translates to permanent, rather than part-time, jobs. Also, there is no doubt this confidence is to some extent reliant on the effects of our relatively weak currency. Nevertheless, the findings are indicative of a growing feel of sustainability within the recovery.
"Despite this, I fear storm clouds may still be gathering on the European horizon. There are now a number of key economies that are actively tackling national deficits and this must surely have a significant effect on the sector some way down the line. In addition, there is a general feeling of disappointment at the manner in which the UK government's stated aim to rebalance the economy and provide a real boost to manufacturing is yet to translate into tangible actions, effectively leaving the sector to fend for itself."
