Yorkshire & Humber manufacturers are seeing an improving economic outlook for the rest of the year as the domestic and global markets have improved, easing fears of a significant recession for industry this year.
The findings in the Make UK/BDO Q2 Manufacturing Outlook survey show a marked pick up in the last quarter with both output and orders increasing significantly to balances at +29% and +24%, with both indicators forecast to grow substantially in the next quarter to levels well above historic averages (both +53% respectively). In particular, Yorkshire & Humber has benefitted from the strong demand for steel and basic metals industries.
In line with this improving picture job prospects are improving substantially with the balance of companies increasing recruitment in the last three months at +24%, well above the national average. Yorkshire & Humber companies are also planning to boost investment with the balance of companies planning to increase investment at +24%, also substantially above the national average.
In terms of overall output this year Make UK and BDO are forecasting a contraction of 0.3% although this is a significant improvement from the contraction of -3.3% made in Q1 and the -4.4% forecast at the end of last year. However, Make UK is maintaining its previous forecast for growth of just 0.8% in 2024. UK GDP growth is at 0.4% for 2023 and 1.3% for 2024.
Dawn Huntrod, region director in the North at Make UK, said: “Manufacturers in Yorkshire and The Humber are seeing a gradually improving picture but the word ‘gradually’ is doing a lot of heavy lifting.
“However, companies are at least seeing a relative period of stability after the political and economic turmoil of the last few years when they have spent most of their time firefighting. Substantial challenges still remain and so long as there is an absence of an overarching industrial strategy growth prospects will remain anaemic at best.”
Steve Talbot, head of manufacturing at BDO in Yorkshire and Humber, said: “Despite the first half of the year seeing some pressures easing for local manufacturers, there are longer-term systemic challenges in the UK market, with built-in inefficiencies that need to be addressed urgently in order for manufacturers to effectively plan and invest.
“Supply chain pressures, for example, are an endemic issue for the businesses we talk to, particularly medium-sized firms. These issues cannot be overlooked by policymakers or we run the risk of tepid-at-best growth for UK manufacturing for many years to come.”
