MIDLANDS manufacturers are maintaining healthy growth despite the uncertain economic outlook, with a balance of 30% reporting increased output and 20% reporting increased orders in the past three months, new information suggests.

According to a major survey published today by EEF, the manufacturers’ organisation and accountants BDO, despite recent negative sentiment the overall picture remains positive.

While at odds with other recent sector data, the EEF/BDOManufacturing Outlook survey shows the sector reporting positive activity in the last three months. Exports remain the main driver behind growth with the gap between overseas and markets still evident.

However, as the economic outlook has become more uncertain, a divergence in views of recent trading conditions and future expectations has opened up. 

A small number of sectors, including metals and electronics, have seen weaker orders intake over the past three months, with corresponding concerns about output expansion evident in the next three months.

In addition, the balance between caution and optimism appears to have shifted for small companies looking at conditions over the next quarter, where less visibility around future orders is keeping confidence in check.    
 
Richard Halstead, EEF Midlands Regional Director, said: “Manufacturers have bucked other recent negative indicators, holding out hope that the recovery has not yet run out of steam. Across much of the sector companies are still busy and orders are holding up, particularly from overseas markets. 

“However, conditions have moved on from the broad-based recovery seen over the past 18 months to a more mixed picture, especially around the short term outlook. The growing challenges in the global economic environment, in particular, are casting a shadow over expectations and seem to be giving some companies pause for thought when it comes to investing and recruiting. But there is cautious optimism that growth will continue through the rest of the year.”    
   
Tom Lawton, Birmingham-based partner and head of manufacturing at BDO, said: “Despite the economic storm clouds looming in the Eurozone, the US and the UK, this was a strong survey for the manufacturing sector, showing positive balances in terms of orders and outputs in the last quarter and expected in the next. 

“However, it is interesting to note the stark differences in expectations between small and large companies, with smaller companies seeming considerably less secure about the future. 
 
“The economic turmoil in some industrialised economies is a cause for concern amongst all manufacturers. In particular, companies will be worried about how their order books will look in the coming months, as well as their prospects of recovering debt on sales already made.”