Manufacturing sector gathering pace

News Article - 16 June 2010
Category: Business

A recent report published by EEF (the manufacturers' organisation) and BDO LLP suggests the British manufacturing sector is successfully regaining momentum after a tough three years brought about by the economic downturn. Many of Britain's manufacturing companies have reported optimistic trading conditions in addition to rising demand over the last three months.

The 'Manufacturing Outlook' report reveals the broad based recovery that first began in 2009 has strengthened, with greater confidence throughout the manufacturing industry leading recruitment drives in most sub-sectors. Output and orders have hit record high levels since the report was first compiled in 1995, which indicates manufacturing could continue to lead Britain's economic revival throughout the second half of 2010.

However, the sector faces uncertainty regarding the strength of future demand and whether output growth is sustainable, leading to a lag in investment balances. Availability of finance - an issue that was exacerbated by the unwillingness of banks to lend during the recession - has also contributed to this issue, as have concerns about changes to business taxes.

The new report has pointed to five key areas in which businesses would like to see Government support: dealing with the deficit, establishing an environment that allows manufacturing to be competitive, providing specific support to mid-market manufacturers and creating and supporting investment in emerging technologies - without forgetting the needs of the traditional manufacturer.

Growth-supporting tax reforms which look set to be introduced in the emergency Budget, could go some way to reassuring manufacturing companies of Government support, but businesses working in the sector will obviously be cautious. Whilst increases in demand are well-received, the industry was hit hard by recession and will be careful about taking too many risks in the early stages of economic recovery.

All businesses working in the manufacturing sector must improve their resilience to economic uncertainty by strengthening job costing and project budgeting. By ensuring financial control at all stages of a project, companies help ensure cashflow remains positive and available to make the most of market conditions as the economy slowly improves. Access business software is used by British manufacturing companies, ensuring financial prudence from the start of a project right through to completion.

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

Article keywords: EEF, the manufacturers’ organisation, BDO LLP, British manufacturing sector, economic downturn, manufacturing companies, ‘Manufacturing Outlook’ report, manufacturing industry, business taxes, mid-market manufacturers, tax reforms, emergency Budget, manufacturing sector, job costing, project budgeting, cashflow, Access business software, British manufacturing companies

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