Any manufacturing upturn could take some time to take hold.
Concerncs about cashflow, credit and confidence are still haunt the sector and are weighing on the outlook for recovery over the next 12 months, according to a major survey published today by EEF, the manufacturers’ organisation and BDO Stoy Hayward.
The third quarter survey shows whilst conditions across the sector have stabilised in recent months, with the pace of decline moderating after a turbulent twelve months of steep declines in output and orders, manufacturers are not signalling expectations for a quick turnaround in the sector’s fortunes.
The negative balance on investment is a particular cause for concern given the need for companies to invest for the upturn. Previous evidence suggests that investment intentions continue to be delayed from some time after the first green shoots appear.
Commenting, EEF Chief Economist, Steve Radley, said:
“Manufacturers are telling us that output is starting to stabilise but there is little sign of confidence coming back. Production is well below pre-recession levels and the road to recovery is likely to be long and bumpy. Tight cashflow and continued problems with access to finance are likely to be major roadblocks. The government has a key role to play in ensuring these problems don't prevent companies from making the investments needed to take advantage of the recovery when it comes."