Manufacturing in region sees boom
NORTH EAST SECTOR IS GROWING FASTEST IN THE UK
THE North East’s manufacturing sector is enjoying a resurgence with new firms launching at a faster rate than anywhere in the UK.
A new report issued by manufacturers’ organisation and BDO LLP, the accountancy and business advisory firm, details the considerable turnaround in manufacturing now in evidence in the region, with 3.9 per cent more firms than a year ago.
The survey results paint a positive picture compared to the lows of late 2015 and much of last year, with the second quarter of this year showing a surge in the North East’s output and order balances.
Manufacturing now accounts for 14.8 per cent of the region’s total output.
The number of manufacturing companies in the North East increased by 3.9 per cent to 4,235 businesses, the fastest growth in enterprises in any region, and while manufacturing employment has remained flat since 2010, it still accounts for 9.6 per cent of the region’s total workforce.
The annual report – Regional Manufacturing Outlook – draws on survey data and the latest ONS figures to provide a longer-term and in-depth picture of the health of UK manufacturing, in which confidence also on the up.
Prior to Brexit, confidence levels sat at 5.9 out of 10, but this has risen to 6.2, making the North East the most improved in the confidence ratings, with much of the positive news and growth coming from a pick-up in the mechanical equipment and metal industries.
The region continues to rely heavily on the EU for its export market, with 62 per cent of all exports from the North East destined for Europe.
Liz Mayes, North East Region Director at EEF, said: “Positive trends in UK manufacturing are being reflected here in the North East and confidence within the sector across the region is growing.
“The pick-up in the mechanical equipment and metals industries has driven growth and UK orders have increased over the year, which has improved confidence.
“Uncertainty around the UK’s future relationship with the EU could be hampering recruitment, but overall the outlook is extremely positive and investment intentions in our region are the strongest in the UK over the past 12 months.”
Craig Burton, partner and head of manufacturing at BDO in the North East, added: “The North East has seen a strong performance and turnaround over the last year and this is clearly reflected in its fourth-place confidence ranking and increasing manufacturing output and orders.
“However to ensure continued growth, we need the government to deliver a long-term, practical industrial strategy for the UK and the regions – with a focus on the mid-market and investing in education, skills and in the North East infrastructure.
“From better roads, rail links to reliable broadband connections and support for Industry 4.0, the government needs to help create the right environment for North East manufacturers’ to continue to be successful in what will undoubtedly be challenging times in the short and medium term.”
Earlier in the summer, the CBI reported British manufacturing firms were seeing some of their highest order books of the last 30 years.
The fall in the pound after the EU referendum has boosted exporters but there are concerns costs will rise as imports get more expensive.