UK manufacturers confidence remains brittle EEF/BDO survey finds

Stronger growth for the UK manufacturing industry may not arrive until the end of the year, according to a survey from industry organisation EEF and BDO.

The outlook for the third quarter sets last week's encouraging PMI data for August against stagnating activity levels and lower levels of confidence among British manufacturers.

However, the expectation remains that output will begin to see an upturn towards the end of 2016. The survey also suggests that to maintain this outlook, lawmakers will have to introduce new strategies to accelerate industry investment.

Output declined in the third quarter, dropping to -7% from -4%, althought that figure is expected to return to the positive side in the last quarter of the year.

Order intake also fell for the quarter to -4% from -2%, with mechanical equipment suffering a particularly brutal drop of -17%.

The UK's decision to leave the European Union has placed manufacturers throughout the country on high alert, and once the government triggers article 50 to formally begin negotiations for its departure further ambitious investment strategies will be critical, according to the EEF/BDO research.

"Manufacturers’ confidence collapsed in the aftermath of the referendum, but our latest survey provides some relief that this has corrected," said EEF's chief economist Lee Hopley.

"Signs of an export revival are helping to drive more optimism about activity in the second half of the year, but concerns about whether the UK economy can shrug off post-referendum challenges is clearly evident," she added.