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Manufacturing activity weakens despite sector's growing role

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Manufacturing is growing in importance in the East of England although activity in the sector weakened in the second quarter in the region, according to a new report. It shows the number of manufacturing businesses in the East has grown by 2 per cent in the last year and they employing almost a quarter of a million people and account for almost 12 per cent of the regional economy.

The EEF/BDO regional manufacturing outlook report says that although output and order balances have continued to ‘grow solidly’ over the past year, driven by export orders, the region’s manufacturers faced a weaker second quarter in line with wider trends. Food and drink producers  – the region’s largest manufacturing sector – faced difficulties with bad weather at the start of the year but this is not expected to slow growth significantly.

The East of England now accounts for 9.3 per cent of total UK manufacturing exports, above the UK regional average but  depends significantly on Europe and is vulnerable to a hard. Asia accounted for  around 16 jper cent of exports and the US around 15 per cent.

Charlotte Horobin, region director for EEF in the East of England, said: “The report shows that industry continues to have an increasingly vital role to play in the East of England. The last year has seen a strong performance with lofty heights being reached in the second half of last year and it is no surprise to see some easing back in the first half of 2018.

“There are well documented challenges going forward, not least those facing the automotive and construction supply chains. Furthermore, the progress of Brexit negotiations has the potential to be a factor in the future performance of manufacturers in the East of England. Despite this, those companies that invest and innovate will still have the best long term prospects and can contribute to raising the productivity performance of the region and the UK as a whole.”

Keith Ferguson, partner at BDO in the East of England, added:  “Local manufacturers have delivered another strong performance. Manufacturing is a real powerhouse sector for our regional economy, creating jobs and opportunities in both domestic and international markets.

“It is crucial the government delivers a long-term, practical Industrial Strategy to ensure a positive trading environment for businesses post-Brexit. Importantly, this will give firms the confidence to continue to invest in automation and digitisation which is so important to the future of UK manufacturing.”

The reported showed that the East of England has 14,040 manufacturing companies, up 2% from last year and that the region accounts for 8.3% of total manufacturing output, third highest in UK. Industry accounts for 11.6 per cent of East of England economy with 243,000 manufacturing jobs in 2017, and increase of 4.3% since 2010. The East of England accounts for 9.3% of UK exports and 60.2% of exports go to Europe, 52.5% of which go to the EU. It says the region’s manufacturers are highly productive compared to the UK average.

Last Updated ( Wednesday, 18 July 2018 06:37 )