Report forecasts manufacturing growth

The Economic Prospects 2010 report forecasts that manufacturing will grow by 1.2 per cent this year before picking up to 3.4 per cent in 2011. The report also forecasts the performance of individual manufacturing sectors is set to sharply diverge, with some enjoying strong growth while others with longer lead times are only just experiencing a downturn.

For the economy as a whole, the best prospects for growth are said to lie in the UK’s export potential as the world economy returns to growth. This will lead to some rebalancing of economic growth in the short term as exports grow this year and manufacturing outpaces the rest of the economy. However, as consumers remain cautious and continue to pay down debt and rebuild savings, the UK economy will grow by only 0.9 per cent in 2010. Credit constraints and a slow recovery in profitability are also likely to hold back business investment.