Manufacturing exports could be set for a boom period despite last month’s base rate rise, according to a series of recent surveys.
Better productivity and improving overseas demand appear to be making up for the high value of sterling relative to the euro.
Business information firm Dun & Bradstreet this week reported an increase in optimism among manufacturers over the past three months. Phillip Mellor, a D&B analyst, said: `Exporters are not raising their prices and increased profits are coming from improved productivity.
`An upsurge in the economies of Europe and Asia has also improved market conditions,’ he added.
Large firms are benefiting most from the rise in exports, according to the latest British Chambers of Commerce quarterly survey. Overall, 13% more manufacturers saw exports rise than fall in the past quarter.
Domestic manufacturing orders are also up, according to the BCC. Northern Ireland and the Thames valley performed best, with the Midlands, northern England, Wales and Scotland seeing less growth.
But the north/south divide could start to narrow again next year, according to economic consultancy Business Strategies.
Growth in the south will be held back by labour shortages and planning difficulties, the firm said, while the north, Scotland and Wales will see a recovery in manufacturing and higher public spending.
Business Strategies said last month’s interest rate rise could be reversed as weak employment growth holds down consumer spending.
But Neil Blake, the firm’s research director, warned: `The risk is that if the expected slowdown in consumer spending does not materialise, there could be higher inflation and sharply higher interest rates.’