EEF members’ views sought on green trade issues
The government is currently seeking views on two separate initiatives intended to facilitate free trade in environmental goods. These are the WTO Environmental Goods Agreement, which aims to reduce tariff and non-tariff barriers to trade for a specific list of products, and the EU’s TTIP talks with the US, under which there are thought to be opportunities to remove non-tariff barriers to trade in environmental goods and services. The Department of Energy and Climate Change (DECC) would like to hear from EEF members who have goods they would like included in the WTO agreement or with views on its benefits, and from those who have identified non-tariff barriers to trade with the US in this area.
For more information contact Peter Gysin at DECC
Weekly focus: Manufacturing Outlook shows upbeat start to 2015
This week EEF published its new Manufacturing Outlook report, covering trends in manufacturing in the first quarter of 2015.
Manufacturing saw a reasonably strong start to 2015, with survey responses on output, orders, employment and investment all pointing towards growth over the past three months and with expectations that these positive trends will continue into the next quarter.
Output and orders positive and in line with expectations
Manufacturers reported positive order balances for the eighth consecutive quarter, although at +13% the balance was down slightly from +17% in the final quarter of 2014. The outlook for the next three months continues to look bright with a balance of 21% of companies predicting further growth in output.
Domestic demand softens as companies in the oil and gas supply chain are hit by falling oil prices
In contrast to previous quarters where growth has been driven by domestic demand, the balance eased to just +1%, down from +11%. The weakness in UK demand was, however, limited to a few sectors, particularly those focused primarily on the oil and gas supply chain. These sectors include basic metals, metal products and mechanical equipment. In each of these cases, manufacturers reported that UK orders had fallen in the last three months.
Export responses turn positive following two quarters of decline in 2014
The export orders balance edged back into positive territory in the past three months, coming in at +1%, up from -3% in the previous quarter. While most exporters saw little change in demand conditions in their main markets over the past three months, there were some signs of improvement in Europe, with 28% of companies reporting an increase in demand.
Manufacturers remain upbeat about growth prospects for their businesses and the UK economy this year
Two key new measures introduced this quarter are confidence indicators covering business conditions and overall activity in the UK economy. On both indicators there are moderate levels of optimism about growth in the next 12 months, with marginally higher confidence levels about business performance compared with UK economic prospects.
Confidence continues to flow through to positive employment and investment plans
This positive outlook is reflected in job prospects and investment intentions which continue to remain reasonably strong. A balance of +16% of manufacturers plan to increase capital expenditure, the same as last quarter, which makes the nineteenth consecutive quarter of positive intentions.
Manufacturing output is forecast to continue to grow at a healthy 1.7% this year, revised down slightly from 2% last quarter. GDP is expected to increase by 2.8% in 2015, a slight upward revision from 2.6% last quarter.
For more information contact Lee Hopley, Chief Economist
During the Third Reading of the Deregulation Bill, Lord McKenzie of Luton referenced EEF’s position on the Lofstedt Review, an independent review of health and safety legislation in the UK published by Lord Young and Professor Loftstedt in 2011.
In the media
The findings from the latest Manufacturing Outlook were reported in The Financial Times (£), The Guardian and The Daily Express.
EEF’s Policy Director Paul Raynes was interviewed on BBC Radio 2 and BBC Radio 5 on the subject of productivity.
EEF’s National Manufacturing Conference last Thursday continued to generate coverage, with Ed Miliband’s speech in The Daily Telegraph and EEF Chairman Martin Temple’s dinner speech in The Independent.
The Financial Times referenced EEF’s Securing a Manufacturing Renaissance: Priorities for the Next Government report in an article on business priorities for the Chancellor’s Budget.
Our comments on the latest PMI data featured in The Guardian and The Daily Mail.
Our response to Labour’s announcement to reduce annual university tuition fees from £9,000 to £6,000 was reported by BBC News.
Week in review
The manufacturing PMI hit a seven-month high in February, rising to 54.1 from 53.1 in January. This marked the twenty-fourth successive month of expansion. All manufacturing sectors reported growth, though consumer goods registered the strongest increase. The domestic market remained the main pillar supporting the upturn, while export demand dipped.
The week ahead
11th March: Index of Production
12th March: UK trade