UK manufacturing industry will see further growth in 2015, survey finds

March 2015

UK manufacturing industry will see further growth in 2015, survey finds: A new survey, which questioned 400 companies from the EEF manufacturers’ organisation, has found that the streak of positive output expansion across the manufacturing industry, which has taken place in the last eight quarters, is due to continue throughout the first half of 2015.

The survey found that plans for investment continues to look strong, with more SMEs planning to recruit in the upcoming quarter.

The fall of oil prices has resulted in lower petrol prices for consumers. However, it has had a negative impact on manufacturers within the oil and gas supply chain, as some investments in the North Sea have been rescheduled or cancelled.

The sectors which have been affected by the falling oil prices are: metal products, basic metals and mechanical equipment. These sectors reported decreasing orders in the United Kingdom in the last three months.

Despite the uncertainty of the economic environment recently, export orders during the beginning of 2015 have gradually improved, putting them into positive territory for the first time since the second quarter of 2014.

Chief economist at EEF, Lee Hopley, said of the findings:

“Any concerns that manufacturing activity might wobble at the start of 2015 have been quashed with our latest survey showing that the main output, orders, employment and investment indicators all remained above their long-term average over the past three months. Particularly promising are signs of a return to growth in new export orders, vital for balanced growth in the UK. It’s clearly not plain sailing for all with the drop in the oil price feeding through to weaker demand in the oil and gas supply chain. While confidence levels overall are holding firm in manufacturing, policies to sustain positive investment plans, encourage exporters and improve access to skills remain the order of the day.”

The EEF has predicted that manufacturing output will continue to increase at rate of 1.7 per cent through 2015, a slightly lower prediction than that of the last quarter (2 per cent).

Gross domestic product is anticipated to increase by 2.8 per cent, a slightly higher prediction than that of the last quarter (2.6 per cent).