North West manufacturers are enduring a difficult end to the year in the face of gathering gloom from the global economy.
That’s according to the latest Manufacturing Outlook survey from EEF, the manufacturers’ organisation, and DLA Piper, the global law firm.
The Q4 survey shows further deterioration in most of UK manufacturing’s key indicators confirming that, after a big step forward in growth in 2014, industry has taken a step back this year.
The gloomy outlook has prompted the first negative forecast for employment and investment in almost 6 years – a trend from which manufacturers in the North West are not immune.
Output and orders are suffering in the region. Output has remained flat this quarter, but a net 10 per cent of firms expect to see it decrease in Q1 next year.
At the same time, a net 14 per cent of firms have seen orders decline this quarter, while a balance of seven per cent expect this trend to continue as we head into next year.
Manufacturers’ employment intentions in the region have also taken a tumble.
On balance, 21 per cent of firms have seen employment decrease this quarter, while 24 per cent predict a decline in Q1 2016. Investment plans for next year have also flatlined, despite a particularly buoyant outlook in Q3.
Unsurprisingly, confidence about the economy is sliding, with North West manufacturers coming mid-table compared to the rest of the UK.
Confidence about their own business performance in the year ahead is looking slightly stronger however.
Across the UK, manufacturing’s concerns about world trade growth and weakening demand from both developed and emerging markets have become more pronounced.
The domestic market is also looking considerably less supportive than in recent years, although some bright spots remain, in particular motor vehicles, aerospace and chemicals.
Nationally, output and orders balances fell sharply in the last quarter – the sharpest quarterly decline since Q3 2014 when the collapse in the oil price first started to impact.