Belfast Telegraph

UK manufacturers embrace upturn from eurozone economy

Britain's factories have bolstered their output by brushing aside Brexit uncertainty and embracing an upturn from the eurozone economy, figures have shown.

The number of firms which saw output increase touched an all-time high of 34% in the third quarter, up from 26% for the quarter before, according to data from BDO and manufacturing body EEF.

Order books also touched record heights on stronger overseas demand, reaching 37% compared with 25% for the second quarter.

The survey said 47% of companies saw exports to the European Union grow for the third quarter compared with last year.

Lee Hopley, EEF's chief economist, said manufacturing firms were "making hay while the sun shines", but she expected growth to stabilise in the coming months.

She said: "There is little doubt that Brexit is likely to weigh on sentiment over the next 12 months with uncertainty over the UK's terms of exit.

"As such, it is vital the Government sends a signal to industry and investors in the UK and overseas that it is doing everything in its power to get growth of the UK economy back on the agenda.

"This must include a bold and ambitious cross-government industrial strategy."

The appetite for "made in Britain" products was strong across the US and Asia, helping to offset a weaker demand on home soil.

However, confidence in the UK economy has fallen for the second quarter on the bounce in response to a slide in consumer spending and higher inflation from the Brexit-hit pound.

EEF has cast a more gloomy outlook for the UK's gross domestic product (GDP), pencilling in growth of 1.6% and 1.3% for 2017 and 2018 respectively.

Tom Lawton, partner and head of manufacturing at BDO, said: "Despite the economic and political uncertainties, manufacturers continue to be a force to be reckoned with, delivering a strong performance as well as increasing both investment and employment plans to make the most of the strengthening export opportunities available to them.

"However, m anufacturers' confidence about the UK economy has continued to fall for the second quarter running.

"With growing opportunities around the world, particularly the eurozone, manufacturers need stability and certainty in Government policy, including Brexit, to provide the right environment for them to commit to the significant capital and research investment required to support continued growth."

It comes after output at UK factories unexpectedly pushed to a four-month high in August thanks to a jump in new orders.

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