Manufacturers remain under pressure

Large sections of manufacturing remain under intense pressure, with escalating costs and tight margins offering little prospect of a significant pick up in the foreseeable future, according to a survey published today.

The fourth quarter Business Trends Survey, published by EEF, the manufacturers’ organisation and RSM Robson Rhodes, shows growth continuing for the tenth consecutive quarter. However, it is at a minimal pace with margins under severe pressure from a range of escalating costs, in particular energy, and global competition. For the second consecutive quarter, more companies report price falls rather than increases.

The survey shows that export orders are showing healthy growth, while domestic ones have now declined for three consecutive quarters. While this suggests that the economy is re-balancing from its dependence on consumer spending and towards more export led growth, the Bank of England will remain vigilant for further signs of weakness in the UK economy.