A surge in demand from Europe has led to new confidence among UK manufacturing companies over their prospects for the remainder of the year, according to a survey published by the manufacturers' organisation EEF.

Survey of almost 400 companies

The survey of almost 400 companies followed publication last week of the Markit/CIPS purchasing managers' index for manufacturing which showed unexpected resilience in UK factory production.EEF found companies were increasingly confident about prospects for the rest of the year, despite predictions of a slowdown because of the triggering of Brexit negotiations and the unexpected general election on 8 June.Conducted in conjunction with accountancy and business advisory firm BDO, the quarterly survey found that output was on track for its fastest growth since 2014, with a weaker pound and an improving global economy driving overseas demand for UK goods.

Increase in demand for goods 

It said Brexit-related uncertainty was presenting "less of a drag than previously expected" with three out of five companies reporting an increase in demand for goods from European markets.Recruitment intentions were "strong" and orders were healthy, said EEF, which revised its growth forecast upwards for the rest of the year to 1.3 per cent.

Another quarter of positive news

Lee Hopley, EEF chief economist, said, "Our survey marks another quarter of positive news about growth prospects for UK manufacturers."Industry is reporting that output and orders have continued to head higher in recent months and the recovery in manufacturing globally is a big part of the story."It's very encouraging that UK manufacturers have positioned themselves to capitalise on the windfall of a competitive pound and resurgent world economy."While growth and confidence hasn't been knocked off track by the snap election, it is not plain sailing from here."There is the continuing challenge of managing input cost increases, ensuring success in attracting and retaining the skills that are in increasing demand and driving up investment in the sector."Whoever forms the next government must set in stone as a matter of urgency a bold industrial strategy that will help cement the foundations for long-term growth for industry."

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Related news:

• Factory output on the up in both UK and Eurozone
• Next government 'must put manufacturing at heart of strategy'
• Rising inflation leads to downgrade in UK growth

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Tom Lawton, a partner at BDO, added, “The Q2 survey results present a very positive and exciting picture for manufacturing, showing increasing orders in both home and export markets. The continued growth in world markets such as Asia, North America and Europe are driving positive demand conditions."These results show yet again that manufacturing has the resilience and the qualities to form one of the foundations of a successful UK economy.“Brexit does create uncertainty and it is important that the new government is clear that Brexit will be structured in a way that serves the best interests of business. As part of this it is vital that we remain open for business and negotiate new trade agreements with the EU and other key markets so that international markets remain open and accessible as soon as Brexit is completed.”For related news and features, visit our Enterprise section.Access hundreds of global services and suppliers in our Online Directory  Get access to our free Global Mobility Toolkit

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