East Midlands manufacturers have yet to see an immediate boost from a change of Government, but are forecasting an improvement to overall economic prospects from a period of greater political stability.
The findings come in the Q3 Manufacturing Outlook survey published by Make UK and business advisory firm BDO.
It shows that while growth in manufacturing continues to be anaemic at best, almost six in ten companies (58%) believe that the recent change in Government will lead to better economic growth overall in the next 12 months. In contrast just 6% of companies expect GDP to decline this year as a result of the new Government.
According to the survey, the balance on output in the East Midlands was -21% but is forecast to jump to +32% in the next quarter. Total orders are following a similar pattern, increasing from -11% to +11% in the next three months.
However, the mixed picture for the East Midlands is highlighted by a dip in recruitment intentions (-16%), although investment intentions are stable at +0% which could reflect the new lines and models coming on stream at car plants in the region.
Business confidence in the East Midlands is continuing to climb, reaching levels last seen at the beginning of the recovery from the pandemic.
Make UK is forecasting that manufacturing will grow by 0.5% in 2024. This is a downgrade from 1.2% forecast in the last quarter but is due to ONS revisions on which the forecasts are based. GDP is forecast to grow 1.1% in 2024 and 1.8% in 2025.
Chris Corkan, Region Director at Make UK in the Midlands, said: “This quarter presents a tale of two halves for the East Midlands with output turning negative and recruitment taking a dip.
“Investment remains positive and business confidence continues to climb and with an Autumn Budget and Spending Review fast approaching, now is the time for Government to pick up the pace and deliver on pre-election promises, most notably the publication of a long-term robust Industrial Strategy.”
Jonathan Lanes, Head of Manufacturing at BDO in the Midlands, added: “East Midlands manufacturers are hopeful that a period of greater political stability will provide a better economic outlook ahead, and that in turn is boosting business confidence.
“Time will tell if that confidence can translate to orders and output, or indeed recruitment intentions where the region relies heavily on skilled workers taking up manufacturing positions.”
