The UK Manufacturing Outlook for Q1 2024 has been released by Make UK in partnership with BDO, providing insights into the current state of the manufacturing sector in the UK.
Make UK reports that British manufacturers are anticipated to encounter a low growth trajectory over the next two years. Their latest projections indicate that the sector's growth rate will remain flat this year, hovering at 0.1%. Subsequently, in 2025, a modest increase of 0.8% is forecasted, which amounts to just half of the anticipated GDP rate for the broader economy.
Here's a summary of the key findings in the Q1 report:
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Output Balance: The balance of output stands at +5%, a notable decrease from the previous quarter's +20%. This indicates that a significant portion of businesses have experienced a decline in output volumes. However, a small percentage of manufacturers have reported improved output volumes.
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Investment Intentions: Despite falling orders, investment intentions have improved with a balance of +15%. This suggests that manufacturers are actively investing in building production capacity, indicating a belief in existing growth opportunities, this is especially evident in the aerospace sector.
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Business Confidence: Overall business confidence remains positive, despite only mild growth in output and order books. Confidence in the UK economy has seen a slight improvement this quarter, although there is a heightened wariness among manufacturers regarding external economic conditions.
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UK Orders: UK orders have shown a relatively improved balance of +1%, compared to last quarter's flat 0% balance. While the domestic market has been a stronghold for the manufacturing sector since mid-2020, the slowdown in total order books has been partly driven by a slowdown in the UK market.
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Exports: Activity remains robust from the EU, with 61% of UK manufacturers reporting positive demand conditions from the region, up from 56% last quarter. North America follows with 30% reporting positive demand conditions, while Asia lags with only 19% of businesses indicating positive conditions.
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Manufacturing Employment & Investment: As of January 2024, there are approximately 68,000 live vacancies in the UK's manufacturing sector, slightly fewer than the 69,000 reported in the previous edition of the report. The investment intentions metric has improved from +10% to +15% since last quarter, indicating manufacturers' plans to invest in human and/or physical capital over the next 12 months.
Click the link for the full Manufacturing Outlook Q1 2024 report from Make UK and BDO.
Article Source: Make UK Industry Report published March 2024. For more information about Make UK, its membership programme and the work they do, please visit https://www.makeuk.org
