Belfast Telegraph

Manufacturing firms 'quietly confident' about year ahead

Half of manufacturing firms are braced for a decline in economic conditions this year although they still expect to increase sales, a study shows.

Research by the manufacturers' organisation, the EEF found grounds for optimism for jobs and investment despite the continued uncertainty of the impact of Brexit.

A survey of almost 300 company executives revealed that half see more risks than opportunities in 2017.

EEF said the results showed that companies felt "quietly confident" about the year ahead.

Terry Scuoler, chief executive of the EEF, said: "Global political upheaval means that 2017 looks set to be another bumpy ride, with manufacturers forced to navigate uncertainty, unpredictable economic conditions and a number of risks that have been amplified by Brexit.

"Against this backdrop a smooth journey is far from guaranteed, but firms are strongly attuned to the challenges and remain fully focused and determined to deliver on their long-term plans for growth.

"With a new digitally-driven industrial era on the horizon and everything to play for, this long-term vision and focus is vital - despite the peaks and troughs manufacturers cannot afford to be diverted away from where they need to be.

"In many ways 2017 is likely to be another unprecedented year of change and uncertainty, but the UK manufacturing sector remains ambitious, resilient and adaptable."

A separate report found that seven out of 10 builders have seen an increase in prices for materials due to the depreciation of the pound.

The Federation of Master Builders (FMB) said its survey of 230 construction firms revealed increases of 22% in Spanish slate and 20% in timber.

Sarah McMonagle, director of external affairs at the FMB, said: "Thousands of smaller building firms are grappling with the rising cost of materials caused by the depreciation of sterling since the EU referendum.

"More than 70% of smaller building firms have experienced increased costs as a result of the weakened currency, with additional increases of 10-15% expected as the new year unfolds."

Accountants BDO said its research suggested that business optimism is at its highest for 15 months, largely as a result of the impact of the cheaper pound on exports.

Peter Hemington, of BDO, said: "British businesses are feeling pretty confident at the moment, helped by the impact of the currency depreciation on export competitiveness.

"There's also a feeling out there that the world economy is picking up again as we go into 2017. Brexit may mean gloomy news in the press and, at times, chaos in government, but our business community is getting on with it on the basis that opportunities for growth are there to be grabbed."

A Business Department spokesman said: "This Government is working closely with industry, and the EEF, on developing an industrial strategy that will increase productivity, upgrade skills and ensure manufacturers are well placed to take advantage of future opportunities."

Clive Lewis, shadow business secretary, said: "Britain's manufacturers are a vital source of good jobs and exports, but today's findings highlight the serious challenges they face in 2017.

"British businesses desperately need certainty and a plan from Government so they can invest in their future."