Three positive stories from UK manufacturing

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We've seen some better news about the UK economy this week as a positive manufacturing PMI was followed by positive PMIs for construction and services.

This doesn't detract from the fact that, with many of the UK's major markets still struggling, the economic situation remains difficult. A number of companies we have spoken to recently have said that, although things are fairly stable and enquiries are holding up, there is a general sense of unease that is causing customers to delay orders.

But far be it from me to spoil the run of good news. Instead, I'm going to share three positive stories from manufacturing.

ONE: We've heard from a number of companies that their strategies to sell into new markets have started to pay off. We have heard about new sales into China, Brazil and India. But it is not just these markets, one manufacturer had started to sell to a number of African countries, and said there was tremendous potential in African markets.

Manufactured exports (Index, 2000=100)

TWO: We've also heard from companies selling into strong sectors having the confidence to take on new workers or make their agency workers permanent. Similarly, the most recent manufacturing PMI indicated that employment was increasing. Looking back, this is borne out by national statistics, which show 2012 was the first year manufacturing employment increased since 1998.

Manufacturing Workforce Jobs (annual % change)

THREE: We have also heard from several manufacturers who are using innovation to grow their companies, and drive efficiency. Despite economic difficulties many companies are still prioritising innovation and this is helping with sales into new markets, improving the customer experience, and maintaining margins. Linked to this, national statistics showed a notable improvement in R&D expenditure in 2011 (most recent data available). Manufacturing accounts for nearly three quarters of this expenditure.

R&D expenditure by businesses in the UK, £bn (real)


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