Knowledge Centre
11th August 2009
Signs of returning confidence in the UK's manufacturing sector are the most positive of any EU country, new research has suggested.
The KPMG's Business Outlook Survey found that confidence appears to be slowly returning to the EU's manufacturing sector, with the net balance for activity (volumes of work) up to +28 from January's record low of -10.2.
Despite being one of the sectors worst hit by the recession, the UK's manufacturing firms posted the most positive outlooks for activity, revenues, new orders, profits and employment.
The net balance for volumes of work expected over the next twelve months rose from +1.2 in January to +53.8, revenues from -7.4 to +41.1, new orders from +4.9 to +53.3 and profits from -26.8 to +7.1.
And while job cuts are still expected in the EU manufacturing sector over the next twelve months, the rate of unemployment is expected to ease, with the net balance up to -13.6 from January's record low of -35.4.
The UK was the only EU country to post positive employment expectations, improving from -29.2 in January to +7.6.
However, KPMG commentators warned that despite the positive signs, "there is still some way to go on the road to full recovery".
Gautam Dalal, head of diversified industrials at KPMG UK, said: "While our survey suggests there are signs of growth in the manufacturing sector, the jury is still out as to whether we are seeing anything more than just an inventory bounce."
Alan Buckle, global head of advisory at KPMG, added: "The question now must be - are businesses properly prepared for the upswing which these figures hint at?
"Expecting an upswing is one thing; having measures in place to actually benefit from weakened competition, fragmented markets and healthier customers is quite another."
IMAGE DPA DEUTSCHE PRESS-AGENTUR/DPA/Press Association Images
UK manufacturing outlook 'most positive in EU'
The KPMG's Business Outlook Survey found that confidence appears to be slowly returning to the EU's manufacturing sector, with the net balance for activity (volumes of work) up to +28 from January's record low of -10.2.
Despite being one of the sectors worst hit by the recession, the UK's manufacturing firms posted the most positive outlooks for activity, revenues, new orders, profits and employment.
The net balance for volumes of work expected over the next twelve months rose from +1.2 in January to +53.8, revenues from -7.4 to +41.1, new orders from +4.9 to +53.3 and profits from -26.8 to +7.1.
And while job cuts are still expected in the EU manufacturing sector over the next twelve months, the rate of unemployment is expected to ease, with the net balance up to -13.6 from January's record low of -35.4.
The UK was the only EU country to post positive employment expectations, improving from -29.2 in January to +7.6.
However, KPMG commentators warned that despite the positive signs, "there is still some way to go on the road to full recovery".
Gautam Dalal, head of diversified industrials at KPMG UK, said: "While our survey suggests there are signs of growth in the manufacturing sector, the jury is still out as to whether we are seeing anything more than just an inventory bounce."
Alan Buckle, global head of advisory at KPMG, added: "The question now must be - are businesses properly prepared for the upswing which these figures hint at?
"Expecting an upswing is one thing; having measures in place to actually benefit from weakened competition, fragmented markets and healthier customers is quite another."
IMAGE DPA DEUTSCHE PRESS-AGENTUR/DPA/Press Association Images
Tags: Economy, Employment
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