NORTH East manufacturers witnessed the biggest turnaround of any region over the last three months, with many reporting a substantial pick-up in activity over the last year.
The quarterly survey by manufacturers’ organisation EEF and chartered accountants BDO reveals highest proportion of firms growing their output ince the second quarter of 2008, and the highest share reporting new orders since the survey began in 1995.
The figures will provide a boost to those companies fearing a double dip recession, with 66% of respondents witnessing an increase in orders and 50% seeing a rise in output compared to just 13% over a year ago.
The has helped improve cashflow among many of the region’s manufacturers, the report shows, which also led to the proportion of those bosses surveyed reporting an increased workforce grow from 4% at the end of last year to 19% in the first quarter of 2010.
Much of the turnaround seems to be the result of an improving export market, with two out of three companies in the North East reporting an increase in overseas sales over the period.
EEF region director Alan Hall for the North East said: “Manufacturers are now seeing a broad-based strong recovery with the North East seeing the biggest turnaround of any region in the UK. This has to be good news for hopes of an export-led rebalancing of the economy.”
The figures are backed up by an improving picture within the motor industry in a report which showed UK new car sales rose 13.5% in May compared with May 2009.
The report by the Society of Motor Manufacturers and Traders showed that the number of new cars sold in the UK during the month was 153,095 compared with 134,858 in May last year.
Meanwhile, Nissan’s global boss Carlos Ghosn predicted last week that 2010 will be a record year for the motor industry, with world car sales increasing from 57 million to 70 million.
However, the positive outlook is tempered by a continued lack of investment, with the EEF report revealing uncertainty over the new Government’s plans to reduce the deficit and fears over the effect of Europe’s debt crisis. North East manufacturers’ forecasts for the third quarter show output growth and order balances slipping back.
Tom Lawton, head of manufacturing at BDO, said: “These are a good set of results, especially as the manufacturing sector is still getting to grips with the uncertainty of the new coalition.
“Those businesses who understand their core capabilities and who work hard to nurture them whilst adapting to the rapidly evolving international marketplace could see growth on an unprecedented scale.”
Source: The Journal 7 June 2010
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