Monday 4 March 2019
The latest survey by Make UK and BDO shows the output for UK’s manufacturers remains stable. But for the second quarter in a row, the gap between orders and output continues to hint that stockpiling rather than consumer orders are driving output.
Europe continues to be the top market opportunity for manufacturers but, for the first time since 2016, the balance for demand coming from Europe is lower than 50%. This drop is tied to Brexit uncertainty with companies scared that input goods may be stuck at ports combined with a wider economic slowdown happening across Europe (UK included).
Compared to last quarter, employment and investment show some signs of pick-up, however employment balances are significantly higher than investment indicating that, in a period of uncertainty, manufacturers may be opting to hire extra staff to help boost output in the short term rather than make long-term investments in productivity enhancing equipment.