EEF manufacturing survey reveals optimism

| March 7, 2011 | 0 Comments

A survey by the Engineering Employers’ Federation (EEF), the manufacturers’ trade body, has revealed manufacturing output eased at the start of 2011, however, firms are optimistic about this year‘s prospects.

The survey revealed a balance of 25% of firms reported an increase in output in the first quarter, down from 33% in the previous quarter.

However, the balance exceeded the EEF’s forecast and contributed to the strongest four-quarter period since the survey began more than 15 years ago.

Meanwhile, confidence is high for the short-term with 28% more respondents expecting output to rise, rather than fall, in the next quarter.

The new order balance hit a record high of 33%. However, pricing pressures are a major concern for the industry, according to the EEF.

Commenting on the figures, Lee Hopley, EEF’s chief economist, said: “Manufacturers have picked up this year where they left off in 2010, with output growing and little sign that the export-led recovery is about to dry up in the near-term.”

However, he cautions: “The outlook for the rest of 2011 still remains uncertain as a number of economic headwinds persist and new geopolitical tensions add another layer of uncertainty to economic forecasts.”

Manufacturers have been helped by the global recovery, weak pound and strong export demand.

The sector accounts for around 13% of economic output.

In related news, last week, the Chartered Institute of Purchasing and Supply (CIPS)/Markit manufacturing purchasing managers’ index (PMI) revealed UK manufacturing activity held its record high in February.

The closely-watched CIPS/Markit manufacturing PMI remained at 61.5 in February – which represents the highest reading since records began in 1992 and exceeded forecasts of 61.

Furthermore, the index continues to stay above the crucial 50 mark, which indicates expansion, where it has been for 19 consecutive months.

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