Exports rise as confidence in UK economy drops
The survey, which included members of the food and drink industry, found that companies’ export sales had risen by 33% in the past year, driven by orders from the EU.
Of the companies surveyed, three out of five reported positive demand conditions across Europe, the UK’s largest market, up from just under half (47%) a year ago – double the figure for orders from Asia.
Peak to export growth
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The EEF believed the third quarter of this year would mark a peak to export growth for the foreseeable future, with expectations indicating that manufacturers are expecting more of the same – rather than any further acceleration in the final period of the year.
The survey also found that the number of companies taking on more employees rose 25% for the fourth consecutive quarter, reaching a three-year high.
However, those surveyed voiced fears over the state of the UK’s economy, fuelled by weak consumer spending and political uncertainty.
EEF’s chief economist Lee Hopley said: “There is little doubt that Brexit is likely to weigh on sentiment over the next 12 months with uncertainty over the UK’s terms of exit.
‘Growth of the UK economy’
“As such, it is vital the government sends a signal to industry and investors in the UK and overseas that it is doing everything in its power to get growth of the UK economy back on the agenda. This must include a bold and ambitious cross-government industrial strategy.”
While firms were confident of their own performance, EEF’s indicator for the UK economy has slipped for the second quarter running, expecting gross domestic product growth of just 1.6% this year, falling to 1.3% next year.
Commenting on the survey results, Tom Lawton, partner and head of BDO’s manufacturing section, said: “With growing opportunities around the world, particularly the Eurozone, manufacturers need stability and certainty in government policy to provide the right environment for them to commit to the significant capital and research investment required to support continued growth.”
Key findings from EEF’s survey
- Output and orders reach historic highs
- Export sales go from strength to strength
- 60% of companies cite EU as offering most growth opportunities, twice that of Asia
- Consistent picture across all sectors and regions
- Positive recruitment and investment picture
- Confidence about UK economy drifts lower
