Our 2017q3 Manufacturing Outlook report is out today. This shows a positive outlook for the manufacturing sector with exports up off the back of a synchronised Eurozone and global trade upswing, aided by Sterling’s fall (itself a double edged sword).
While UK manufacturers are confident about their firm’s performance, the same can’t be said for their confidence about the UK economy with confidence indicators falling for the second quarter in succession. The economy is not out of the woods yet.
This blog takes a look at our research over the Parliamentary Summer Recess to help inform policy makers on the global outlook, how the manufacturing sector is doing and what is needed from the industrial strategy later this year.
1. Trends in global trade
The performance of the manufacturing sector is strongly linked to what happens in the global economy. While the latest upswing in trade is boosting the sector, our report Global Trade – run aground or structurally sound, highlighted a widespread slowdown across major economies in world trade with data showing a decade of below-trend growth. This is being driven by global value chains in retreat, an increase in protectionism and trade finance drying up.
2. How the sector is doing one year on from Brexit
The EU is the destination for almost half of UK exports, with the recent upswing being spearheaded by exports to the EU. Given the imminent separation of the UK from the EU – how has the economy been performing since the referendum? Immediate catastrophe has been averted, but things aren’t rosy either.
Our 2017 Regional Manufacturing Outlook, covered the period following the EU referendum going into more detail on how each region has performed.
3. Industrial Strategy – what’s missing?
With the unexpected General election, development on the industrial strategy was postponed. The first draft was a good start and with the final version expected later this year we set out the gaps that needed to be filled to make the strategy more robust.