LONDON - For the first time in 12 years, manufacturing demand is up in all UK regions, according to the Regional Trends Survey published by the Confederation of British Industry (CBI) and Experian.
Northern Ireland and Wales were most optimistic in terms of business confidence, but confidence was also high in the East of England, South East & London and Yorkshire & the Humber.
New orders rose for each UK region for the first time since May 1995. Overall, the increase was the strongest in three years, with Wales and Yorkshire & the Humber seeing the sharpest increase in 12 years.
For the next three months, Wales, the East Midlands and the North East expect increases in new orders. Scotland, the South West and the East Midlands expect high export orders.
Output increased, though at a slower pace than last quarter, with Wales, the North East, the North West and the East Midlands reporting high gains.
The high gains are expected to continue, as Northern Ireland, Wales and the East Midlands plan to see high factory output.
Factory gate prices rose inline with last quarter’s pace, with domestic prices rising significantly in five regions.
Overall cost increases were modest, allowing manufacturers to boost profit margins by increasing output prices. By region, half indicated slower unit increases and half reported sharper increases.
Employment, however, dropped significantly, most notably in the West Midlands, the South West, the South East & London, and East of England. The South West, the West Midlands and the North East expect to decline for the coming months, while the East Midlands, East of England, the North West, Scotland and Northern Ireland are optimistic for near-term employment.
Experian estimates the area will see 30,000 jobs lost this quarter, with 8,000 from the South East and London and 7,000 from the West Midlands.
“With expectations of strengthening factory output and export demand over the coming months, the survey presents a more encouraging picture of UK manufacturing than recent official data,” said Peter Gutmann of Experian. “Manufacturers have faced up to a strong pound and an improvement in business confidence reflects the more positive outlook for 2007.”
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