Confidence high among Yorkshire manufacturers

Yorkshire & Humber manufacturers have seen an easing in conditions in the last quarter, continuing the downward drift from the very strong picture of growth seen across the board during 2017 according to a major survey published today.

The survey from manufacturing organisation EEF and accountancy firm BDO shows a combination of an easing of growth and increased political uncertainty in some global markets.

The downward drift in output balances in some sectors from the lofty heights of last year and a weaker outlook in the construction sector supply chain mean the outlook is slightly more subdued than it has been for some time.

According to the survey output increased to +39 per cent but both domestic and export orders slipped to +11 per cent and +16 per cent respectively.

The slight easing is reflected in the intention to recruit which has fallen back to +28 per cent but this figure remains high by historic standards.

In contrast, however, the confidence of Yorkshire & Humber firms to invest is the second highest of any UK region at +28 per cent, reflecting the business confidence index of companies.

Looking forward, EEF has made a small downgrade to its economic forecasts.

It is now forecasting GDP growth of 1.2 per cent in 2018 and 1.3 per cent in 2019 (1.5 per cent and 1.3 per cent respectively from quarter one) and manufacturing to grow by 1.9 per cent and 0.5 per cent (down from 2 per cent and 0.6 per cent respectively).

EEF director of member engagement for the north, Richard Halstead, said: “This is a strong performance by Yorkshire & Humber companies which reflects the positive sentiment in the region.

“Whilst there may be some easing to come from continued political uncertainty in line with the national picture, the long-term prospects for companies that invest in skills and training in particular will remain bright.”

Steve Talbot, director and head of manufacturing at BDO in Yorkshire and the Humber said: “Following a strong 2017, we are starting to see the impacts of the ongoing political and economic uncertainty on manufacturers in Yorkshire & Humber. “However, despite the sector’s slowing performance this quarter, manufacturers in the region still remain cautiously optimistic about the future.

“It is now more important than ever for the Government to not lose sight of the needs of manufacturing, or indeed the wider economy, during the continuing EU negotiations.

“I have no doubt that manufacturers in Yorkshire & Humber will continue to be successful but the right support and trading environment will make a huge difference. Having more transparency from the Government will give them the confidence to invest in skills, automation and digitisation, which are so important to the future of UK manufacturing.”

The message stands in stark contrast with a similar study in March which found that manufacturers were ignoring the uncertainty over Brexit as improved global demand fed growth across most of their supply chain.

This strong performance had led the EEF, to upgrade growth forecasts for manufacturing for this year and next, with the sector still expected to outperform the economy overall in 2018.

The dip in confidence is likely to bring further scrutiny towards the Government’s industrial strategy.

Manufacturing continues to provide a sizeable proportion of the Yorkshire region’s economic output.