Manufacturers in the East Midlands have seen a mixed start to the year, according to the latest quarterly Manufacturing Outlook survey from Make UK and business advisory firm BDO.
According to the survey, output and total orders in the region were relatively strong at positive balances of +29% and +24% respectively, figures which are well above historical average levels. However, export orders fell and investment levels are only just in positive territory and well below other UK regions.
By contrast recruitment intentions among East Midlands companies are very strong, showing that despite the mixed picture companies remain confident enough to continue hiring.
As with the national picture the big challenge for companies, in addition to attracting and retaining talent, remains the escalating inflationary pressures which are forcing companies to raise prices at record levels for the fifth successive quarter.
In response to the rapidly escalating costs, Make UK is urging the Chancellor to use next week’s Spring Statement to take whatever measures are necessary to support companies dealing with rapidly increasing energy prices in particular. Make UK has called on the Chancellor to delay the proposed increase in National Insurance due to come in April.
Make UK has forecast growth for manufacturing in 2022 of +3%.
Charlotte Horobin, region director for Make UK in the Midlands, said: “Manufacturers in the East Midlands have seen a mixed start to the year given the continuing difficulties being experienced by the aerospace and automotive sectors. Companies are also now facing eye-watering increases in costs which are threatening to stop the economy in its tracks.
“As a result, the most immediate priority for the Chancellor in the short term must be to use his Statement to do whatever it takes to support companies through this difficult period.”
Jon Gilpin, head of Manufacturing at BDO in the East Midlands, said: “Output and order balances in the East Midlands remain at historically high levels. UK-wide, however, we are seeing a worrying widening of the gap between supply and demand.
“Manufacturers on the whole are currently managing to meet demand, but this may be difficult to sustain. Costs are rising at a speed that they cannot respond quick enough to and, combined with supply chain disruptions which will sadly now be exacerbated by the invasion of Ukraine, manufacturers will be looking for support from the Chancellor next week.”
