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21 March, 2022 - 17:03 By Tony Quested

East of England manufacturers hiring but not investing

Manufacturers in the East of England have seen a mixed start to the year, according to the latest quarterly Manufacturing Outlook survey from Make UK and business advisory firm BDO.

Output and total orders are strong by historical standards at balances of +27 per cent and +30 per cent respectively. 

This is likely a reflection of the full re-opening of hospitality given the importance of the food and drink sector to manufacturing in the region. This is backed by the fact export orders are flat with UK orders dominating.

This mixed performance is reflected in the jobs outlook across the region, with recruitment intentions improving substantially compared to the last quarter but investment intentions falling.

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 at record levels for the fifth successive quarter.

In response to the rapidly escalating costs, Make UK is urging the Chancellor to use this week’s Spring Statement to take whatever measures are necessary to support companies dealing with rapidly increasing energy prices in particular. 

Make UK has called on the Chancellor to delay the proposed increase in National Insurance due to come in April. Make UK has forecast growth for manufacturing in 2022 of +3 per cent.

Charlotte Horobin, Region Director for Make UK in the East of England, said: “Manufacturers in the East of England have seen a mixed start to the year given the continuing difficulties being experienced by the aerospace and automotive sectors. 

“Companies are also now facing eye-watering increases in costs which are threatening to stop the economy in its tracks. As a result, the most immediate priority for the Chancellor in the short term must be to use his Statement to do whatever it takes to support companies through this difficult period.”

Keith Ferguson, Head of Manufacturing at BDO in the East of England, added: “Output and order balances in the region remain relatively strong. UK-wide, however, we are seeing a worrying widening of the gap between supply and demand.Manufacturers on the whole are currently managing to meet demand but this may be difficult to sustain. Costs are rising at a speed that they cannot respond quick enough to and, combined with supply chain disruptions which will sadly now be exacerbated by the invasion of Ukraine, manufacturers will be looking for support from the Chancellor in his Spring Statement.”

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