EEF warns of cloudy forecast for manufacturing

News editor

It’s a gloomy start to the week with EEF revising down its manufacturing growth forecast.

Stories abound in MWP Advanced Manufacturing of companies reshoring, investing in equipment and hiring new staff, but a cloud of uncertainty hangs over the wider manufacturing landscape with Europe, China and Greece threatening to undermine the sector.

This is one of the conclusions from the latest Q3 Manufacturing Outlook survey from EEF and law firm DLA Piper.

According to EEF, a so-called ‘rollercoaster of risks’ from around the world has led to a deterioration in all of UK manufacturing’s key indicators, particularly in output and orders, where falling demand at home and abroad is taking its toll. EEF add that the balance of manufacturers reporting output growth has dropped to its lowest level since Q4 2009 and, at -2%, contrasts sharply with manufacturers’ expectations.

Export orders have edged downward to hit a six year low in response to continued problems in Europe over the summer and the slowdown in emerging markets. Over a third of companies, however, report seeing signs of improving demand in Europe. In contrast, the proportion of companies considering growth opportunities in Asia has fallen and domestic demand is not making up for the shortfall in overall demand from overseas.

Bright spots can be found with manufacturers’ investment and recruitment intentions looking optimistic with a net 6% of companies expecting to recruit during the next quarter and a balance of 2% looking to increase investment.

Optimism about the wider UK economy’s growth prospects remains fairly stable into the new year, but manufacturers are feeling less secure about their own growth prospects, a situation reflected by a drop in the confidence indicator.

The net result of all this that EEF is halving its manufacturing growth forecast from 1.5% to 0.7% (down from 1.7% at the beginning of the year) and is adjusting its GDP forecast from 2.6% to 2.5%.

Q3 Manufacturing Outlook in brief:

  • All major survey indicators down on the last quarter – output and orders turn negative and output falls to lowest level since Q4 2009
  • Domestic demand weakens further with second consecutive negative balance
  • New export orders edge down again to hit a six year low and pressure mounts on export margins
  • Recruitment and investment plans hang on to positive ground, but confidence for the year ahead again edges down
  • Manufacturing growth forecast revised down to 0.7% from 1.5% in Q2 and 1.7% at the beginning of the year.

Source: EEF/ DLA Piper

This year saw the introduction of a new law requiring new cars registered in the EU to emit no more that an average of 130g of CO2/km, and by 2021 the fleet average to be achieved by all new cars is set at 95g CO2/km.

In the UK alone, new car registrations have risen for the 42nd consecutive growth, with the burgeoning alternatively fuelled vehicle (AFV) market continuing an upward trend with 44,165 vehicles sold and market share up 0.9% on 2014. For those who prefer hydrocarbons in their tank, sales of petrol cars edged diesels slightly with petrol enjoying 48.8% market share this share compared to diesel’s 48.5%.

With new cars alone being built to high exacting environmental standards, it seems fitting to give a plug to Cenex’s National Low Carbon Vehicle Event (LCV2015) which revs up this Wednesday in Millbrook.

The event is organised by CENEX, which says: “LCV2015 is a free-to-attend event that explores the latest research, technology developments and early market deployment for low carbon vehicle technologies, through a combination of exhibitions, a comprehensive seminar programme and a ‘Ride & Drive’ where delegates can try out cutting edge solutions for themselves.”

These vehicles include the BMWi8, Porsche Panamera S Hybrid, an Autonomous Pod courtesy of the Transport Systems Catapult, and Ricardo’s Land Rover Freelander 2.

A busy discussion programme will look at a range of essential transport issues, including the Intelligent Mobility seminar, which takes place on 10th September 7, 2015 and features speakers including Steve Yianni, Transport Systems Catapult; Iain Forbes, Department for Transport; Dr Geoff Davis, HORIBA MIRA Ltd; Prof. Nick Reed, TRL and Martin Green, Visteon Corporation.

CENEX says discussions will include a look at Britain’s autonomous vehicle projects, plus the so-called Connected Corridor project. Launched by the UK’s Automotive Electronics Innovation Network, this initiative “aims to demonstrate the possibilities for novel services and business models when a car is connected to a mobile wireless communications network.”

The full seminar programme can be found at this address: please visit:

A wholly new vehicle – and one that is no stranger to The Engineer – forms the centrepiece of a networking event talking place in Telford this week.

Materials Testing 2015 takes place between September 8-10 at Telford’s International Centre, with the Bloodhound SSC show car taking centre stage at tomorrow’s networking event where attendees can see a presentation on the progress of the Bloodhound project, and the role that non-destructive testing (NDT) and condition monitoring is playing in the project.

The organiser says that entry is free of charge although visitors must register online in advance. It adds that the exhibition will feature a series of free talks about NDT careers, including how NDT professionals can achieve Engineering Council registration. Technical talks will cover a myriad of topics ranging from the use of NDT for 3D printing to advances in sub-sea inspection and corrosion analysis in pipelines.