Monday, January 5, 2015

News: Manufacturers less confident

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Manufacturers' bullish expectations at the beginning of 2014 have eased back, leaving firms cautiously confident as they head into 2015, according to the annual EEF/Aldermore Executive Survey.

The Engineering Employers' Federation (EEF), the UK trade organisation dedicated to the future of manufacturing, offers business services, government representation and industry intelligence and around a quarter of the UK's manufacturing businesses are members and many more use its services to help them work.

Manufacturers taking the survey expecting UK economic conditions to improve almost halved from 70% to 37% this year. At the same time, the number expecting conditions in the UK to deteriorate has tripled, rising from 5% in 2014 to 17% this year. However, global economic conditions are of greater concern for manufacturers - 38% expect them to take a turn for the worse in 2015 (compared to just 5% at the beginning of 2014).

Seven in ten manufacturers (70%) say that the UK will be a competitive location for them in 2015. They are also confident that their staff numbers, sales, margins and productivity, will be heading in the right direction with those expecting an increase in these core measures consistently outstripping those expecting a decline. Almost seven in ten (69%) expect to improve productivity, while 58% expect to boost UK sales. Just under half (49%) expect to be taking on more permanent staff.

Export sales also look positive – albeit expectations are down on last year. Just under half of manufacturers (49%) expect to see an increase in 2015, while three in ten (30%) expect sales to remain steady.

Terry Scuoler, Chief Executive of EEF, says: "Manufacturers' confidence at the beginning of last year was very high - one year on and, while still positive, it has very evidently eased back. The realities of 2014 have taken the edge off future forecasts and what we are now seeing as we head into 2015 is a far more muted outlook, tempered by a backdrop of difficulties in the EU and wider geo-political concerns.

"The sector is still making good strides, but confidence can be fragile and with an election on the way it is vital that uncertainty and disruption are kept to a minimum. Recovery is by no means guaranteed and we would urge party leaders – and the next Government of whatever shade - to remain focussed on delivering a fully balanced, stable economy where manufacturing is enabled to expand and grow."

The EEF opened its new offices in Catcliffe, Rotherham last year.

EEF website

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