Earlier this week, Lee blogged about our latest Manufacturing Outlook survey which showed that manufacturing had made a positive start to the year. In today’s blog, I’ll take a closer look at trends around the country.
Most regions positive on output and orders
Positive output balances were reported almost everywhere, with the exception of Scotland and the North West. We can attribute the weaker balances in these regions to exposure to North Sea investment and a decline in activity in basic metals respectively.
Responses across the country were more mixed on new order intake. Companies in the East of England and the South East and London recorded stronger export balances while there was more notable strength in domestic demand in the West Midlands and Yorkshire and Humberside.
Employment growth less evenly spread
Those regions noting stronger positive balances on new orders were also more likely to have seen more companies increasing employment over the past three months. In all regions, except the East of England and the South East and London, employment balances were lower than three months ago.
There is more optimism across most regions about the next three months
Only in the West Midlands is the output balance lower in the next three months compared with the past three months. And in the East of England there are slightly weaker expectations about total orders in the next three months, although responses are still positive.
And looking to the year ahead
Looking at the headline confidence indicators introduced to our survey this quarter, all regions are, on average, expecting to see an improvement in business conditions and activity in the UK economy over the next twelve months.
That said, there is some variation between regions with manufacturers in the West Midlands and the South West expecting slightly stronger improvements in business conditions in the year ahead than the rest of the country. Respondents in the East Midlands and the North East have below average business growth expectations for the next 12 months.
There is slightly less variation in expectations about economic improvement in the next year. While all regions are forecasting a modest improvement, companies in the North West report the weakest expectations and in general manufactures in the south of the country are less confident about UK growth than those in the north.