East of England manufacturers enjoy strong end to the year
Manufacturers in the East of England have seen a strong performance at the end of the year, according to the latest quarterly Manufacturing Outlook survey from Make UK and business advisory firm BDO.
According to the survey, total orders in the region reached a balance of +75 per cent which was the best performance of any UK region and a very strong figure by historical standards.
The figure was buoyed by strong domestic and overseas orders which were both above the national average and a reflection of world markets which have rebounded very strongly throughout the course of the year.
The UK order balance of +67 per cent was also the best performance of any UK region and comes after a number of weaker quarters for the region.
As a result of the strong performance, the outlook for investment intentions has jumped, possibly in response to the Chancellor’s extension of the Annual Investment Allowance in the Autumn Budget. Companies remain cautious about hiring as the recruitment balance remains flat.
As with the national picture, the big challenge for companies, in addition to attracting and retaining talent, remains the escalating inflationary pressures which are forcing companies to raise prices, in many cases significantly.
Make UK has forecast growth for manufacturing in 2021 of +6.9 per cent, down slightly from +7.1 per cent, and growth in 2022 of +3.3 per cent.
Charlotte Horobin, region director for the East of England at Make UK, said: “While manufacturers in the East of England will be able to enjoy some festive cheer this year, their spirits will be tempered by the eye watering impact of escalating cost pressures which are leading an increasing number to pass these on to the consumer.
“Given the global nature of some of these pressures there is little sign that they will abate anytime soon.
“However, they will hope as we enter a fresh year that these will gradually unwind, with the compensation being that demand prospects among their major markets continue to look strong.”
Keith Ferguson, head of manufacturing for BDO in the East of England, added: “Manufacturers faced a brutal 10 per cent decline in output in 2020. This year, they have rebounded proudly with some record-breaking figures.
“Cost pressures – input prices, labour, logistics and inflation – are settling in for the long haul and will continue to impact manufacturers, however they can enter 2022 on significantly firmer footing than last year.”