| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Follow Finfacts on Twitter

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

News : UK Economy Last Updated: Apr 26, 2011 - 5:31 PM

UK manufacturing recovery is firmly on track and looks set to continue
By Finfacts Team
Apr 26, 2011 - 4:17 PM

Email this article
 Printer friendly page
British Prime Minister David Cameron hosted a meeting of business ambassadors in Downing Street with Trade and Investment Minister Lord Green, former chairman of HSBC Bank, to discuss how the government can boost Britain’s export market, Jan 10, 2011.

The UK manufacturing recovery is firmly on track and looks set to continue, the business body, the CBI said today. Strong domestic and export orders growth has boosted factory output. But inflationary pressures continue to intensify as companies pass on the burgeoning cost of raw materials by raising the price of goods at the factory gate, according to the UK’s leading business group.

Of the 451 manufacturers that responded to the April Quarterly Industrial Trends Survey, 36% said they had seen an increase in output in the last three months, while 15% said it had fallen, giving a rounded balance of +20%. This was driven by strong growth in both domestic (+15%) and export (+24%) orders, with the rates of growth at their fastest since April 1995 (+17% and +34% respectively).

Demand and production are expected to continue rising over the next three months. Companies predict that output growth will be sustained at a similar pace to this quarter (+22%). At the same time, manufacturers expect domestic and export orders to continue to increase over the next quarter (+11% for both), at rates well above their long-run averages.

Output has also been boosted by rapid restocking over the past quarter. Companies have built up inventories of raw materials (+13%), work in progress (+10%) and finished goods (+17%) to the greatest degree since July 1979 (+13%), January 1995 (+10%) and July 1977 (+19%) respectively.

In line with the ongoing recovery in the sector, manufacturers took on more staff for the third quarter running. The net number of companies saying that they had added to their workforces in the last three months (+15%) was the highest since January 1974 (+21%). The outlook for employment over the next quarter is also positive, with a balance of +7% of firms expecting to recruit.

But alongside robust growth in activity, companies’ production costs have risen rapidly during the last quarter. A balance of +53% said average unit costs had gone up, the highest since October 2008 (+56%), and a further acceleration on significant cost rises already experienced over the past year. As a result, manufacturers have driven up domestic and export prices rapidly (+29% and +30%), with the rates of inflation the strongest since April 1995 (+29%) and April 1985 (+34%) respectively.

Inflationary pressures show no sign of receding over the coming quarter, with firms expecting costs and prices to increase sharply again over the next three months (a balance of +43% for average unit costs, +36% for domestic prices, and +25% for export prices).

John Cridland, CBI Director-General, said: “The manufacturing recovery remains firmly on track. Strong demand at home and abroad and rapid restocking over the past quarter have led to another solid rise in production, with growth expected to continue over the next quarter.

“It is also good news that manufacturers are continuing to take on more staff to handle the increased workload.

“But production costs have jumped markedly during the last three months, rocketing ahead after a full year of already rapid cost inflation. This is unsurprising given the recent surge in oil and other commodity prices.”

Manufacturers have also reported a further tightening in capacity pressures. 29% of firms expect plant capacity to be a likely constraint to output over the next three months, the highest since October 1988 (29%). As a result 46% of companies plan to invest to expand their capacity during the next twelve months, a survey high (October 1979).

Investment intentions on the whole remain strong. In particular, firms plan to spend more on plant and machinery (+7%) and product and process innovation (+28%) during the coming year relative to the previous twelve months.

Monthly data from the survey showed 21% of manufacturers said that total order books were above normal, while 31% said that they were below. The resulting rounded balance of -11% is down on March (+5%), but is still above the long-term average. Overseas demand in April remains well above the average also, a balance of -6% on export order books, albeit weaker than in March (+5%).

Lai Wah Co, CBI head of Economic Analysis, said: “Perceptions of order book levels have dipped in the monthly data, but the readings are still well above the long-run average. The quarterly questions show that manufacturing orders have risen strongly over the past three months and output growth remains robust.”

The April 2011 CBI Industrial Trends Survey was conducted between 23rd March 2011 and 11th April 2011. 451manufacturing firms replied. During the survey period the pound averaged euro €1.14 and $1.62, while Brent Crude averaged $119.06 per barrel, compared with euro 1.18 and $1.55, and $93.05 per barrel in the January survey period.

Related Articles
Related Articles

© Copyright 2011 by Finfacts.com

Top of Page

UK Economy
Latest Headlines
UK in 28th rank of 30 advanced OECD nations for health resourcing: Economist Intelligence Unit
Business on a Shoestring: Keeping startup costs low in UK and Ireland
UK "underlying growth has stopped"
41,000 London properties held by foreign companies - 90% in tax havens
UK GDP rose 2.6% in 2014 up from 1.7% in 2013
Northern Ireland private economy contracted in December 2014
Northern Ireland may have a 12.5% corporation tax rate from 2017
UK moves ahead on 'Google tax' despite criticism
PwC charged with "selling tax avoidance on an industrial scale"; indulging in "scams"
Income inequality damages economies; Rich-poor gap highest in 30 years
Cameron warns of risk of another global recession
Only 80,000 of 1.1m UK jobs added since 2008 were full-time employee positions
UK added 112,000 jobs in third quarter; Pay inches above inflation - first time in 5 years
Germany and UK agree to restrict 'patent box' tax incentives to local R&D
German retailer Aldi to create 35,000 new jobs in UK by 2022
UK GDP growth slowed in the three months to September
UK retail sales fell in September; Tesco, Debenhams, Foxtons report market stress
UK faces more austerity and less chance of tax cuts
Globalization, the underclass and the need for a new model - Part 2
Northern Ireland PMI shows sharp increase in activity
UK economic growth revised up - above pre-recession level
London world’s most expensive city for companies to locate employees
UK retail sales in August best performance since January
UK economy added more net jobs in past 4 years than rest of the EU combined
UK to announce stiffer penalties for offshore tax evaders
UK economy since launch of the euro in 1999
IMF says British pound overvalued
UK profit warnings reach highest first half total since 2011
UK GDP up 3.1% in 12 months to end Q2 2014; Economy overtakes pre-crisis 2008 peak
Wealthy foreign students overtake finance professionals as renters in prime Central London areas
UK attracts most inward investment projects since records began in 1980s
Trends in UK and US part-time and self employment since 2008
UK labour participation at 73% - highest in decade; US at 63% - lowest since 1978
More than 20,000 client names of Jersey tax haven bank leaked
UK house prices overtook their 2007 peak in Q2 2014
UK recovery continues at robust pace
UK employment rose again at a record pace in the three months to April
UK tax revenues rose to record in 2013/2014 with help from tax dodgers
Overseas visits to London in 2013, up 43.5% in 10 years
UK economy grew 0.8% in Q1 2014; Almost back to 2008 peak