Following on from our blog on Monday, in which we picked out our 5 key highlights from Regional Outlook 2017, today we’re going to take a look at some of the best performing regions over the last year, in our 4 key indicators: output, orders, investment and employment.
The Midlands dominate output balances
The two Midlands regions were the star performers over the last year when it comes to output balances, recording the joint highest of any region. The dominance of the transport sectors in these regions, and their associated supply chains, as well as the recent boost to capital goods sectors will have played an important part in their rise to the top of the output league table. The West Midlands also backed this up by recording the joint highest employment balance over the last year, an impressive year indeed.
Demand on the up in the North West
Despite a poor second quarter, in which the North West dropped below the UK average in all key indicators, the region has enjoyed an across the board improvement over the last year. But it are its order balances that have been most impressive. The region has seen not only the largest average order balance, but also the greatest improvement in its balance, from last year’s Regional Outlook. This is welcome news to the region, following some weak activity from the back end of 2015, and reflects broadly the strong year the automotive sector had, as well as the rise in steel prices, and the improved demand flowing to the metals sector.
Investment comes back online in the North East
As we mentioned on Monday, investment was by far the weakest indicator in this year’s report. That said, the weak performance was not ubiquitous across all regions, with one exception in particular catching our eye – the North East. The investment balance over the last year in the North East was the strongest of any region, with the 2017q2 balance rising to a historically high level of +38. Much of this improvement is due to the pick-up in the mechanical equipment and metals sectors, on the back of improving global demand, as well as pick-up in steel prices and in the oil and gas industry. The region had been one of those that was hit hardest from the decline in the oil and gas industry, and so the recent upturn is welcome news to manufacturers in the region.
Where are the jobs at? Yorkshire and Humber according to our survey
Yorkshire and Humber (as well as the West Midlands) recorded the highest average employment balance over the last year. In fact if we look at the data going a bit further back, the employment indicator in Yorkshire and Humber has been resilient over the last 5 years, consistently outperforming the UK average. Special mention must also go to the South West who saw the greatest improvement in employment balance from last year’s Regional Outlook. Given the weaker investment balances we have seen, it appears manufacturers are more inclined to take on more workers to fulfil demand, rather than increase capital expenditure given the uncertain economic and political climate.
Despite these regions being the top performers, it must be said that the report broadly shows manufacturing, and a regional picture, in good health. The average balances for all indicators for all regions are positive (bar investment), with a number of indicators at multi year highs. As such, it makes for pleasant reading…and you can read the full report, with extensive regional breakdowns, here.