Belfast Telegraph

Fight to stay competitive, firms are told as UK expansion slows

By Clare Weir

Northern Ireland manufacturing companies must fight to stay competitive if they are to keep winning export trade, it has been warned.

Stephen Kelly, chief executive of trade body Manufacturing NI, was speaking as new statistics showed that Britain's manufacturing sector saw a slowing pace of expansion after posting growth of 0.3% for the second month in a row.

The Office for National Statistics (ONS) said the figure between June and July was boosted by an increase in factory output of items such as pharmaceutical and electrical products as well as food and tobacco.

"Our experience in Northern Northern Ireland is perhaps a little more positive than these statistics are demonstrating," said Mr Kelly.

"While our manufacturing sector is growing at a faster rate, we are experiencing the difficulties of increasing costs, with continued pressure on prices and this has become even more pronounced as we see exchange rates at levels not seen in recent years.

"The sector which continues to do well is transportation, including aviation, however this is dependent on securing competitiveness in international markets.

"Whilst we continue to be positive about future growth, there is concern about losing competitiveness."

The modest increase further dented hopes that the UK's factories are charging back to life, with the sector's quarterly performance down by 0.6% compared to the previous three months.

Overall industrial output beat expectations to rise by 0.5% in July after a 0.3% gain in June, helped by a 3.6% increase in electricity generation. Throughout the quarter, industrial production fell 0.1% on the previous three months.

Separate official data released also showed that the UK's trade deficit hit its highest level for more than two years in July.

The latest figures from the Office for National Statistics (ONS) showed that the goods trade deficit hit £10.2bn, from £9.4bn in June. The ONS said it was the widest monthly deficit since April 2012, with a rise in exports more than cancelled out by a greater rise in imports.

Those figures came on foot of PriceWaterhouseCooper's latest Northern Ireland Economic Outlook, which showed that manufacturing export sales to Brazil are helping to drive Northern Ireland's economic recovery. The total value of manufacturing exports to Latin America was £71m and sales to Brazil included machinery, pharmaceuticals and foods, especially milk powder.

And the latest Purchase Manager's Index – produced for Ulster Bank by Markit – signalled that firms here recorded a fourteenth successive month of growth in output, employment and export orders in August.

A number of manufacturing firms in Northern Ireland have announced new jobs in recent weeks, including Magellan Aerospace in Greyabbey, which makes aeroplane parts and Enniskillen company Webtech, which specialises in the production of labels.

Belfast Telegraph