Manufacturing makes up roughly 10% of the economy, and amidst Brexit fears, it is at its highest since February 2008 and expanding at its fastest rate.
Kamal Ahmed, the BBC economics editor, said that British manufacturing is riding high on two big trends – a weaker currency and global growth. Sterling’s fall in value following the Brexit referendum has made UK exports much more competitive.
The latest Executive Survey by The Manufacturer revealed that UK manufacturing companies expect to be busy again in 2018, with demand from domestic and export customers forecast to be up on last year.
Expanding global manufacturing activity and advances in technology creating an increased appetite to invest have enabled UK manufacturing sectors to be ready for growth, and inclined to bring more skills into their workforce.
Companies perceive the risks as:
*What could go wrong in export markets
*Big emerging economies such as China
*Brexit – exchange rate volatility and impacts on input costs, and an increase in EU nationals leaving.
Despite the risks, there are no indications that manufacturers will put their investment elsewhere in 2018, still seeing the UK as a good place to their manufacturing operations.
Companies will need a plan of action in regard to risks as they see a pick-up in activity, and the majority of companies will be making the necessary investments to fulfil growing order volumes,
Lee Hopley, chief economist at manufacturers’ organisation EEF, said: “UK manufacturers were, in the main, in good shape as 2017 came to a close, with the majority of sub-sectors enjoying growth.
“Manufacturers’ expectations for the year ahead point to output and export growth being maintained through this year on the back of continuing support from a burgeoning global economy.
“This, together with an ongoing commitment from government to deliver on its industrial strategy, will be crucial in helping to propel the sector forward,” she said.
David Lewis, managing director, integra people, warrington