Yorkshire and Humber manufacturers reported weaker than expected growth during the second quarter of 2015, despite companies forecasting a pick-up in activity in 2015.
The latest quarterly Manufacturing Outlook survey, published by EEF, the manufacturers’ organisation and DLA Piper, show the sector is still in positive territory, but is showing signs of a weakening in several key indicators, most notably in output and orders.
In the first quarter a net 29 per cent of the region’s manufacturers saw output increase, with an even healthier 46 per cent predicting an increase for the second quarter. But that failed to materialise, with the latest findings showing that just four per cent saw an increase in output during the second quarter.
There was a similar picture with total orders, where a net 25 per cent of the region’s manufacturers saw orders increase at the beginning of the year. A net 58 per cent of companies believed orders would increase in the second quarter but, in reality, just eight per cent of local manufacturers saw an increase during the last quarter.
More worryingly, employment which has been strong since the beginning of the year now looks to be slipping with a balance of eight per cent of firms expecting their employment levels to drop in the next quarter.
A key factor carried over from the first quarter is the impact of slowing activity in the oil and gas sector on supply chain industries, where investment delays have knocked UK orders.
EEF said this is being felt more deeply in other parts of the UK, such as the North East and North West, but appears to be largely bypassing manufacturers in Yorkshire. The survey does contain some bright spots. While exports remain flat, a third of manufacturers are feeling more confident about European sales prospects and this is driving stronger expectations for exports in the coming quarter.