Manufacturing surges to three year high

The rebound this quarter is being led by a stronger domestic market which has often lagged behind exports. But, conditions in overseas markets have also picked up with the balance of companies seeing growth in export sales rising to a two-year high in the past quarter. In line with recent official statistics the upswing in output is broad based across all sectors.

There are also signs the UK’s investment performance may finally begin to regain ground lost in the past three years with investment intentions, especially amongst SMEs, escalating sharply to some of the highest levels seen in the survey’s history.

This is critically important if we are to see a rebalancing of the economy towards net trade and investment and, avoid relying on the consumer and the housing market to drive the economy forward.

Commenting, Ms Lee Hopley, Chief Economist at EEF, the manufacturers’ organisation, said:

"Industry’s prospects have brightened considerably in the past few months and it’s particularly positive that this improving trend can be seen across all manufacturing sectors. There is growing confidence that improving trading conditions will continue into the final months of this year and then accelerate through the gears in 2014.

"However, while the signs of recovery that have emerged so far this year are positive, the need for better balanced growth from net trade and investment remains a necessity. As companies become more confident about their growth prospects, we need to see this translate into commitments to invest in new capacity, and for this to take place in the UK.