Today we have published our second annual Executive Survey – a survey of senior executives discussing the year ahead, from views on the economic outlook to growth prospects and challenges.
Broadly, the survey shows that manufacturers are less downbeat about the prospects for the UK and industry in the year ahead with manufacturing leaders indicating a ‘steady as she goes' outlook.
Before we look at how 2013 is expected to play out, let's quickly look at what happened in 2012 and how that matched manufacturers' expectations in the same survey a year ago.
At the start of 2012, manufacturers were more pessimistic about the outlook for the UK economy and manufacturing than economists. They were right to be – growth faltered at the beginning of the year and GDP looks set for a mild contraction across the year as a whole.
However, the economic news was not entirely gloomy last year. Employment across the economy and in manufacturing increased; there was some solid export growth to markets outside Europe; and we saw a small pick-up in business investment. All as predicted at the start of the year by manufcaturers – see below.
So what about this year?
Back to the here and now - our latest survey shows that manufacturers are expecting the picture in 2013 to be a little better, with 30% of respondents expecting an improvement against 23% anticipating a further deterioration in overall economic conditions. And for conditions in manufacturing, the same proportion of respondents (30%) expect a deterioration as an improvement in trading conditions this year.
Variation in sector performance to continue
The uncertainties are weighing more heavily on some sectors than others. Companies in the metals sectors are the most negative about industry growth prospects in 2013, with a balance of 13% of companies expecting conditions in the sector to deteriorate this year; mechanical equipment is also gloomy about the 2013 outlook.
Some sectors are more upbeat; the transport sectors, in particular, are forecasting a moderate improvement in the outlook. Companies in the rubber, plastics and chemicals sectors are also, on balance, predicting a pick-up in trading conditions this year.
Be sure to come back later today when I'll blog again on how manufacturers expect key business indicators such as employment, sales and profits to turn out in 2013.