UK Manufacturers Prepare for More Growth in 2014
The manufacturer’s organization of the UK, EEF, is revising projections for the 2013 production year to indicate stronger than expected growth, and is further gearing up their supply chain infrastructures in anticipation of an even stronger year in 2014. While the overall economy of the UK is expected to grow by 2.4 percent, manufacturing output and order balances are expected to grow by an even higher 2.7 percent. This is sparking manufacturers to step up their investments in things such as more labor, systems, and holdings, according to the EEF chief economist Lee Hopley. While the forecast in the UK remains bright, the main concern is in global economies, which continue to be shaky at best. According to Hopley, the key to continued growth and expansion lies in the government’s ability to keep growth incentives in place.
The balances for output and order balances are down slightly from the two and three-year highs seen in quarter two of 2013, but do not show signs of falling back to recession level lows. For last quarter, output balances were up by 19 percent, while order balances were up by 18 percent. The strongest balances occurred in the areas of motor vehicle manufacturing and electronics manufacturing.
Investment intentions by manufacturers are up from 24 percent to 27 percent, which is the highest it has stood in the past six years. According to the EEF, the demand for goods is strong in the UK, but other markets around the world are still fragile. Though the short-term outlook is fairly positive, questions still remain about the long-term future of UK manufacturing. Much of that growth will depend on markets that turn to the UK for manufactured goods, such as those in Asia, around Europe, and in some developing nations around the world.
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