Region’s factories are top for orders across UK

Manufacturers in the region reported positives across every key indicator of business health, according to the latest quarterly Manufacturing Outlook survey by EEF, the manufacturers’ organisation, and accountancy and business advisory firm, BDO LLP.

A balance of 54 per cent of Yorkshire-based manufacturers reported an increase in orders in the second quarter – higher than all the other UK regions.

EEF said the data, published today, reveal that business confidence in Yorkshire has firmly taken root. Yorkshire came in second place in the UK in terms of output, but was pipped to the post by the East of England.

A balance of 39 per cent of Yorkshire manufacturers have ramped up recruitment during the second quarter, second only to the South West, with a further 28 per cent planning to invest further during the year ahead.

The one area of caution is in exports, where demand weakness in key markets and the appreciation of sterling is adding to uncertainty, resulting in a small decline in the number of Yorkshire manufacturers confident of achieving export growth in the third quarter of the year.

Andy Tuscher, Yorkshire region director at EEF, said: “There is a palpable sense of mounting confidence amongst manufacturers here in Yorkshire and this set of results tells us that it is fully justified.

The continuing trend for strong positives is a further boost for businesses emerging from the shadow of the recession and a further boost to the local economy and the job market.

“Manufacturers in this region will also have an important role to play in helping to sustain broad based growth across the UK.”

Jason Whitworth, partner at BDO LLP in Yorkshire, added: “Government manufacturing policy is clearly paying dividends and is creating an environment in which Yorkshire manufacturers are comfortable enough to commit to future investment, both in terms of employment and capital.

“This is a very positive indicator for the rest of the year.

“What is now needed is for this success to be replicated abroad. We would encourage the Government to introduce more supportive measures for exports, especially given the tentative nature of economic recovery in Europe.”

The strong results for the region beat the national picture.

The EEF is now forecasting growth of 3.6 per cent in UK manufacturing, a substantial upgrade from the 2.7 per cent forecast at the beginning of the year.

EEF chief economist Lee Hopley said: “There is a definite sense of confidence amongst manufacturers, reflected in a range of recent data releases and the continuing strong positive balances in our latest quarterly survey.

“This should help sustain broad-based growth across the UK. Given that manufacturers’ investment plans have been hovering near record highs for several quarters, industry has likely been a significant contributor to the recent recovery in business investment.

“There is, however, some uncertainty about the net trade component of better balanced growth. While we see a lot of activity from companies looking to secure new export business, the still uncertain outlook in some parts of the global economy means a turnaround in exporting fortunes in the short term is not guaranteed.”

Tom Lawton of BDO, which helped with the study, said: “Now that manufacturers have been freed from the shackles of recession, they are proving their 
importance to the UK economy by leading it out of the downturn, outperforming both the 
service sector and GDP more generally.”

The survey showed that for the first time in almost four years, the North East (63.5) was the best performing English region, followed by the South East (60.8) and London (60.4).

Strong output growth across England and Wales was supported by greater inflows of new work.