Manufacturers see weaker than expected growth despite hopes of a pick up

Picture: PA Wire
Picture: PA Wire
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​Yorkshire and Humber manufacturers​ ​reported weaker than expected growth​ d​uring the second quarter of 2015, ​despite companies forecasting a pick-up in activity in 2015.

T​he 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 ​wa​s 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 t​his 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.