Last year, Britain’s manufacturers ended 2017 on a very positive note after discovering the sector had its strongest three months for growth since 2014. This rise has resulted from British factories benefiting from an increase in economic growth in the eurozone as well as the wider world economy.
Tom Mongan, General Manager at Subcon Laser had this to say:
‘Here at Subcon Laser it seems we mirrored other British manufactures and ended 2017 on a very positive note. In fact for most of 2017 we had our strongest sustained period of growth since the companies formation back in 1988.’
The most recent PMI figures (Purchasing Managers’ Index) have shown new orders expanding over the course of the last 17 months. This is due to an increase in production in response to new orders, as well as the introduction of new product lines both at home and abroad.
Rob Dobson, Director at IHS Markit, which was responsible for compiling the survey, had this to say:
‘The main growth engines were the intermediate and investment goods sectors during December, suggesting resilient business-to-business demand and capital spending trends, albeit in part due to rising exports. Growth in the consumer goods sector remained weak in comparison and was the only sub-industry to see output expand at a slower pace than November.’
Increasing demands for goods made in the UK required by European manufacturers may be affected with Britain’s plan to negotiate its decision to exit from the EU at the end of March 2019. The strongest growth for British manufactures is said to have come from partly finished goods provided by other firms and transformed into other products such as car bonnets. Therefore, car exports have contributed to the narrowing of trade deficit with the rest of the world.
British manufacturing appears to be trending for two reasons: a weaker currency and global growth and development. The cost of importing food and fuel to the UK has also surged due to the pound’s weakness since Brexit. These trends have made UK exports more competitive. Figures have shown that 54% of firms said they expect to find an increase in production over the duration of the next 12 months.
But what does this mean for export requests?
Well, companies have seen a rise in export requests from Europe and the Middle East. This global boost is helping to push the UK manufacturing sector along although this could be helped by a waning share of world production from British Firms. The latest figures even show how car factories have helped to steer the country’s manufacturing production to its longest period of growth in 20 years. This has contributed to the growth of the economy by 0.4%.
Although the PMI survey indicates a stronger growth from manufacturers than what has been revealed by the official figures, factory production has been a big plus for the economy in the last year. Another survey from the CBI (Consideration of British Industry) found that companies are planning to hire more workers in the next year.
Neil Carberry, CBI’s Managing Director states:
‘Britain’s record on job creation is second to none, and this year’s survey shows that this is set to continue in 2018 […] It’s essential that businesses work to address skills gaps with colleges and other providers – but with high employment rates, domestic training alone can’t meet all our needs. Firms will need to be able to access people from outside the UK to support future growth and deliver the Industrial Strategy.’