Manufacturing sector experiences positive quarter

News Article - 02 August 2010
Category: Industry

Latest CBI figures suggest the UK will avoid a double dip recession, following encouraging manufacturing sector recovery in the second quarter of 2010. In the Quarterly Industrial Trends Survey, 38% of CBI members said output rose between April and June, whilst 15% said it fell. This is the best balance since April 1995, and a positive development for both manufacturing sector and the UK economy as a whole.

Exports continue to lead recovery with a +18% order balance, whilst domestic orders have started to pick up again with a balance of +10%. Until now, domestic orders have remained mostly flat in these indicator surveys in the post-recession climate. Costs have also increased by 25%, the biggest rise since October 2008.

CBI members are also reporting credit constraints have fallen to pre-recession levels. Banks tightened up access to credit during the economic downturn and were less willing to lend, which hit the manufacturing sector hard. Many smaller manufacturing companies, already struggling with rock-bottom demand, were forced into administration.

Employment remained roughly stable in Q2 2010, and this is expected to continue into the next quarter. Firms also took action to rebuild stocks, a task that has proven difficult for cash-strapped companies since the recession took hold. However, the CBI warned overall manufacturing growth will slow down in the coming quarter, with output expected to grow by a balance of +6%.

Overall, the outlook is positive but cautious. Demand for UK-made goods has steadily increased abroad - with home-based demand starting to climb as well - lending manufacturing a much needed boost that should help it to recover strongly.

Now the outlook for the sector is improving, businesses must address internal inefficiencies in order to compete effectively for market share as demand continues to rise. Project and job costing software can help by tracking the actual costs of projects against the budgeted costs. Over time this can assist companies in improving their overall project management through more accurate projections, enabling them to ramp up production more profitably as the economy continues to improve.

For more information, please call Access on 0845 345 3300.

Article keywords: Business news, industry news, manufacturing news, enterprise software, business software,

---

More industry news

• Think tank warns UK may have already slipped back into recession
• Growing demand for HR staff in technology and international sectors
• Boosting business growth a ‘priority’ to avoid Eurozone slowdown
• HMRC launches alternative disputes pilot scheme this week
• December employment statistics disregard gloomy recruitment predictions
• Eurozone manufacturing PMI shows modest improvement
• UK scores highly for economic governance by ratings agency
• Government launches two-year project focusing on manufacturing sector
• Burden of regulation on UK businesses ‘too high’

Back to news home page »