In our last post we reported on how well British manufacturing was doing, despite all the uncertainty surrounding the recent election and Brexit negotiations. We’re delighted to note that the good news continues, with another very positive set of figures, this time from the CBI. The politicians may be having a torrid time of it but those of us who design and make tangible products have been successfully forging ahead regardless. We’ve certainly been busy at Dymond Engineering, making everything from retail display equipment to galvanised birdfeeders to bespoke desks frames and legs.
British manufacturing riding a wave of demand
The CBI’s latest Industrial Trends Survey shows that UK manufacturing is positively booming. Figures from 464 manufacturers found that total order books have climbed to the highest level since August 1988. This was way above expectations – the market had forecast a rise of 7 points but the actual numbers showed a whopping 16 points.
So why are Britain’s manufacturers enjoying the strongest demand for their products in almost 30 years? It all comes off the back of a recovering global economy and a weaker pound. This combination of factors is working wonders in terms of boosting order books.
The survey, which gives a monthly snapshot of how the UK manufacturing sector is performing, found that it wasn’t simply a story of a weaker pound stoking demand – both export and total order books were both at their highest levels for decades. This provides some hope that a stronger manufacturing sector will help to carry the economy as higher inflation puts downward pressure on consumer spending.
Looking at the findings in more detail reveals particularly strong performances by the food, drink, tobacco and chemicals industries, with an increase in orders across 13 of the 17 industrial sub-sectors tracked each month.
Rain Newton-Smith, the CBI’s chief economist, said: “Britain’s manufacturers are continuing to see demand for ‘Made in Britain’ goods rise with the temperature. Total and export order books are at highs not seen for decades, and output growth remains robust.”
The economy is the priority
Whilst everything is going swimmingly for manufacturers at this present moment, Newton-Smith does sound a note of caution: “To build the right future for Britain’s economy, manufacturers and workers, the government must put the economy first as it negotiates the country’s departure from the EU. This approach will deliver a deal that supports growth and raises living standards across the UK.”
His is not a lone voice. Britain’s biggest business groups, the British Chambers of Commerce, manufacturers’ group EEF, the Federation of Small Businesses and the Institute of Directors have all joined the CBI in issuing a joint statement asking the government to put the economy first in Brexit talks – and to secure a transitional deal that preserves access to the European single market.
It is widely expected that the UK will need such a transitional arrangement to cushion its exit from the EU after 2019. The business groups are anxious to secure an interim agreement to “maintain the economic benefits of the single market and the customs union until a final settlement between the UK and the EU is agreed and implemented”.
Please don’t rock the boat!
There are hints from Chancellor Philip Hammond that he is listening to the business community and that the government may be backing away from its earlier preference for a more immediate and painful “hard Brexit”.
Let’s hope so! The companies who come to us for our design-engineering, value-engineering and metal fabricating services, are on a roll. They, and all those other hard-working manufacturers who are adding so much to the economy, deserve a deal that preserves the current trading arrangement with Europe while the longer-term arrangements are thrashed out.
It’s anybody’s guess how these negotiations will turn out, but in the meantime if you need high-quality light-weight metal products, including components, office furniture and retail display systems – just get in touch with us.