We all know that in the past few months the global economy has become markedly more volatile, and with it, the outlook for growth considerably less certain. But EEF's latest Manufacturing Outlook survey shows that manufacturers are still seeing growth.
A balance of 12% of manufacturers reported increased output in the last three months, and a balance 4% of manufacturers reported increased orders. This is following on from ONS data that shows the sector has grown for eight consecutive quarters since the recession ended.
However, increased uncertainty, most notably emanating from the Eurozone, means that manufacturers are more wary in their outlook for the next quarter.
Looking ahead to the next three months the outlook is more gloomy. A flat output balance and a mildly negative orders balance (-1%) suggest that any growth will be muted in the next three months. As a result of this we have revised down our forecast for growth in manufacturing to 0.9% next year. We have also revised down our forecast for growth in the economy as a whole to 1.0%.
Manufacturers' intentions to recruit and invest remain relatively upbeat, with a balance of 12% of companies saying they intended to increase capital expenditure in the coming year, and a balance of 5% stating that they were likely to take on new employees in the next three months. However, the weakening economic situation may yet cause companies to rein in these plans.
We will be blogging on other aspects of the survey later in the week.