UK manufacturing conditions mixed in Q3, but outlook improves
UK manufacturers experienced a mixed start to the second half of 2024, with domestic orders weakening but exports performing well, according to the quarterly Make UK/BDO Manufacturing Outlook survey released on Monday.
Factory output dropped to balance of -2% in the third quarter, down from +9% in the second quarter, marking the first time that production has contracted since late 2020, the report showed.
UK orders recorded a balance of -4%, but export orders rose to +11%, with strong demand from the EU as manufacturers invest in plant and machinery, and electronic goods.
However, confidence across the secod remains high, with the sentiment index rising to 7.1 from 6.9 previously. As such, the expected output balance figure is expected to surge to +33% for the coming quarter.
BDO said that the "extraordinary turbulence" experienced over the past few years has hopefully stabilised.
"While the output metric performance hasn’t significantly grown in the first two quarters, the combination of consecutive positive quarters mixed with consistent demand conditions in the market led analysts to be quietly confident about growth staying the course," the survey said.
"With little in the way of notable economic shocks occurring in the UK market over the past eight months, this confidence in consistency had been shared by economists and the industry alike, as measured by a remarkably positive and robust business confidence index."