By William Schomberg
LONDON (Reuters) – Britain’s struggling factories are seeing some signs of recovery, helped by a long-awaited burst of restocking and a pickup in export orders that could help the sector in a challenging 2024, a manufacturing trade body said on Monday.
Make UK said factories raised output at three times the pace of growth in orders in the final three months of 2023.
That represented the greatest degree to which output has outpaced orders since a rush to stockpile in late 2019 when companies were worried about a possible no-deal Brexit.
The share of firms seeing a rise in export orders rather than fall rose to a balance of +10% from -3% but domestic orders stayed flat, the first time that export orders have exceeded UK orders since the coronavirus pandemic.
“After the economic and political shocks of the last few years there is some semblance of stability returning for manufacturers,” Fhaheen Khan, Senior Economist at Make UK, said.
“While growth is not exactly supercharged, the positive announcements in the Autumn Statement can at least allow companies to plan with more certainty without having to constantly fight fires.”
Finance minister Jeremy Hunt announced on Nov. 22 that he was making permanent the tax incentives for businesses to invest that he introduced earlier in the year.
Make UK said expectations for export and UK orders in the first quarter of 2024 were positive at +7% and +8% respectively while recruitment expectations for early 2024 hit +19%. Investment intentions slowed but stayed positive.
The group increased its forecast for manufacturing growth in 2023 as a whole to +0.8% from -0.5% but that improved pace remained weak. Growth was expected to slow in 2024 to just 0.1% as the impact of higher borrowing costs took its toll.
The report, which was conducted with accountants BDO, surveyed 303 companies between Oct. 25 and Nov. 29.
(Reporting by William Schomberg, editing by Suban Abdulla)
