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South East: Manufacturers enjoy 'strong year' as confidence remains high

By Dan Teuton
24 July 2017

A new report out today from EEF, the manufacturers’ organisation and BDO LLP, the accountancy and business advisory firm, shows that South East and London manufacturing has had a strong year, with output balance particularly impressive. The second quarter of 2017 marks the 17th consecutive quarter it has been rooted in positive territory, a feat matched by no other region.

Productivity in the South East and London is 122.7% of the UK average, making it the most productive region in the UK by some way.

Confidence in the region is also high, with the South East and London taking top spot in the nation’s confidence rankings, jointly holding the accolade with the West Midlands.

The annual report – Regional Manufacturing Outlook – draws in survey data and the latest ONS figures to provide a longer-term and in-depth picture of the health of UK manufacturing. This year, it reveals that the South East and London now boasts 31,555 manufacturing businesses in the region, with its largest manufacturing sectors being food and drink, electronics alongside wood and paper products.

While the number of manufacturing jobs in the region have fallen by 2.9% between 2010 and 2016, 406,000 people are now employed by manufacturers across the region. This is the highest number of manufacturing jobs in any one region, but still accounts for only 3.8% of the region’s total workforce.

The region continues to enjoy a healthy export record, accounting for 26.9% of the UK’s manufactured exports in 2016, the largest of any region. 46.2% of those exported goods go to the EU, slightly less than the national average. The region sends 20.3% of exports to North America, the highest of any region, and its share off exports to Asia & Oceania and Western Europe, excluding the EU, is above the UK average.

Moreover, manufacturers in the South East and London have seen orders balances pick up considerably since the start of the year, with companies reporting that sales have been better than expected over the post-EU referendum period.

Martin Strutt, EEF director for membership engagement in the South East, said: “Positive trends in UK manufacturing are being reflected here in the South East and London with confidence within the sector across the region is remaining high. In spite of a squeeze on particularly domestic budgets, manufacturers continue to perform well, seeing again the region best in class across the UK.

“Uncertainty around the UK’s future relationship with the EU is hampering investment and recruitment, but overall the outlook is extremely positive.”

Chris Pooles, partner and head of manufacturing at BDO in Reading, said: “South East and London manufacturers have experienced a strong year and this is clearly reflected in the regions confidence ranking and increasing manufacturing output and export balances.

“However to ensure continued growth, we need the Government to deliver a long-term, practical Industrial Strategy for the UK and the Regions - with a focus on the mid-market and investing in education, skills and in the South East and London infrastructure. From better roads, rail links to reliable broadband connections and support for Industry 4.0, the Government needs to help create the right environment for South East and London manufacturers’ to continue to be successful in what will undoubtedly be challenging times in the short and medium term.”

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