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December 6, 2010    

EEF manufacturing survey reveals caution for 2011

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by Kay Murchie

A survey by the Engineering Employers’ Federation (EEF), the manufacturers’ trade body, has revealed manufacturing output continues to operate at record levels, however, they are cautious about next year‘s prospects.

The survey revealed a balance of 33% of firms reported an increase in output in the fourth quarter, unchanged from the previous quarter - which represented the highest since records began in 1995.

The new order balance was at 32% - again unchanged from the previous quarter.

Meanwhile, the number of manufacturers looking to hire staff also picked up with a balance of 23% - the highest balance since the survey began.

Commenting on the figures, Lee Hopley, EEF’s chief economist, said: “Manufacturers are ending the year on a high and should enter 2011 on a strong footing.”

However, he cautions: “Manufacturers are still somewhat cautious about making significant investments in new machinery or taking on permanent employees.”

Last week, the Chartered Institute of Purchasing and Supply (CIPS)/Markit manufacturing purchasing managers’ index (PMI) revealed UK manufacturing activity surged at a record pace in November.

The closely-watched CIPS/Markit manufacturing PMI rose to 58 in November from an upwardly revised 55.4 in October.

Not only was the reading the highest since September 1994, it confounded analysts expectations of a reading of 54.6.

Furthermore, the index continues to stay above the crucial 50 mark, which indicates expansion, and it has been above this level for 16 consecutive months.

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