What percentage of Manufacturers expect industry upswing?
5th January 2015
Merely a week into the New Year and the manufacturing industry in the Westcountry is already tempering its optimism for 2015 with a heft dose of realism.
According the annual EEF/Aldermore Executive Survey, only 37% of manufacturers expect economic conditions in the UK to improve, down from 70% last year while 17% expect them to deteriorate which is up from 5% last year.
Some firms' bullish expectations at the beginning of 2014 have now made way to cautious optimism.
The survey also showed that 38% of manufacturers expect conditions to take a turn for the worse on the global stage compared to 5% last year.
However despite the doom and gloom forecast, there is some good news too as seven in 10 manufacturers (70%) believe the UK will be a competitive location for them in 2015.
They are also confident that their staff numbers, sales , margins and productivity, will be heading in the right direction with those expecting an increase in these core measures consistently outstripping those expecting a decline.
Almost seven in ten (69%) expect to improve productivity, while 58% expect to boost UK sales. Just under half (49%) expect to be taking on more permanent staff.
Export sales also look positive - albeit expectations are down on last year.
Just under half of manufacturers (49%) expect to see an increase in 2015, while three in ten (30%) expect sales to remain steady.
The hotspots for export growth are expected to be North America, Asia and South America while, in line with ongoing economic and geo-political uncertainty, manufacturers see Europe and the Middle East as ???not spots'.
In fact, geo-political risks are a key concern for many manufacturers - almost six in 10 (59%) say that an escalation would be detrimental to their company's prospects in 2015.
Outside of this, manufacturers see rising input costs (45%), significant shifts in exchange rates (35%) and upward pressure on pay (29%) as the top risks to growth for their individual companies.
With all these factors on the horizon, the jury is out over whether 2015 will be a year of risk or opportunity.
While a third of manufacturers (35%) see more risks than opportunities for their business in the year ahead, these are exactly matched by those who don't (35%).
They are, however, agreed on what the year ahead means for activity.
Manufacturers' top priorities in 2015 will be improving marketing and branding (46%), launching a new product or service (44%) and consolidating UK activity (36%).
2015's focus will be on consolidating rather than speculating, with riskier expansion activities way down on their list of priorities.
Phil Brownsord, South West region director at EEF, which represents the manufacturing industry, said: "Manufacturers' confidence at the beginning of last year was very high - one year on and, while still positive, it has very evidently eased back.
"The realities of 2014 have taken the edge off future forecasts and what we are now seeing as we head into 2015 is a far more muted outlook, tempered by a backdrop of difficulties in the EU and wider geo-political concerns.
"The sector is still making good strides, but confidence can be fragile and with an election on the way it is vital that uncertainty and disruption are kept to a minimum.
"Recovery is by no means guaranteed and we would urge party leaders - and the next Government of whatever shade - to remain focused on delivering a fully balanced, stable economy where manufacturing is enabled to expand and grow."
Read more: http://www.westernmorningnews.co.uk/Manufacturers-express-cautious-optimism-year/story-25797118-detail/story.html#ixzz3NweE5cOq
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