Output: strong start to year
Published: 15 April, 2007
Britain's manufacturers have posted a strong first quarter, according to one of the leading barometers of the sector published by EEF, the manufacturers" organization and RSM Robson Rhodes.
Output and orders surpassed expectations in the last quarter with engineering recording the sixth consecutive quarter of positive balances. Strong world markets have supported manufacturers’ order books in recent years and this remained the case with balances on domestic and export orders unchanged from the previous quarter.
The picture was mixed in terms of output by sector although all balances remained positive. Electrical equipment was again the most positive sector whilst motor vehicles showed a marked improvement. Metal products and other transport also reported better trading conditions.
Looking forward, companies reported the highest level of confidence since the third quarter of 2004 indicating that momentum should be maintained during the first half of this year. Firms forecast export orders continuing to improve although there is also greater optimism for domestic order books on the back of a healthy UK economy.
EEF chief economist, Steve Radley, said: "Manufacturers are taking the effects of a strong currency in their stride and are continuing to post strong figures on the back of strong world markets, improving productivity and investment in innovation. “However, despite enjoying healthy order books, few manufacturers are able to raise prices. This shows that manufacturing can continue to enjoy healthy growth without the need to raise interest rates to clamp down on inflationary pressures.”
Companies reported the highest level of confidence since the third quarter of 2004
