Our Q2 survey continues to be a beacon of good news for the UK economy. The recovery that has been taking root in manufacturing since the end of last year is alive and well and gaining ground. A trend manufacturers seem confident will continue into the second half of this year.
The latest quarterly survey reports that the momentum in manufacturing activity seen at the start of 2017 continued into the second quarter, although at a slightly more moderate pace. The balance of companies reporting growth in output and orders slipped back from last quarter’s multi-year peaks. Nevertheless, both components remain firmly anchored in expansionary territory and significantly higher than the levels prevailing over the past two years. The strength in demand is prompting manufacturers to expand capacity with further employment gains this quarter, while investment intentions remain positive, but down on the previous three months.
Manufacturers have continued to report a solid intake of new orders from the domestic market over the past three months. However reasons for optimism about the domestic market have now been overtaken by opportunities in the rest of the world. Last quarter saw the largest quarter on quarter gain in the export balance in the survey’s history. And in the most recent three months the balance of companies increasing their export sales advanced further.
If you would like to discuss any of the topics raised in this report, please don't hesitate to contact Tom Lawton or your usual BDO Manufacturing partner.