Analysis by EEF, the manufacturers’ organisation, and accountancy firm BDO, reveals a downward drift from the very strong picture of growth seen across the board during 2017. Tony McDonough reports

Manufacturers saw a slowing of growth in the first few months of this year as Brexit fears loom – but both output and orders remain high by historical standards.

The latest quarterly analysis of the sector by EEF, the manufacturers’ organisation, and accountancy firm BDO, reveals a downward drift from the very strong picture of growth seen across the board during 2017.

The survey shows a combination of an easing of growth and increased political uncertainty in some global markets, the downward drift in output balances in some sectors from the lofty heights of last year and, a weaker outlook in the construction sector supply chain mean.

According to the survey both output and orders eased back from the previous quarter to +29% and +43% respectively, but both figures remain high by historical standards. The slight easing is reflected in the intention to recruit which has fallen back to +14%, but given the last quarter was at a very strong historic high this is not unexpected.

In contrast, however, the confidence of North West firms to invest is the strongest of any UK region at +29%.

Looking forward, EEF has made a small downgrade to its economic forecasts. It is now forecasting GDP growth of 1.2% in 2018 and 1.3% in 2019 (1.5% and 1.3% respectively from Q1) and manufacturing to grow by 1.9% and 0.5% (down from 2% and 0.6% respectively).

EEF director of member engagement for the North, Richard Halstead, said: “This is a strong performance by North West companies which reflects the positive sentiment in the region.

“While there may be some easing to come from continued political uncertainty in line with the national picture, the long-term prospects for companies that invest in skills and training in particular will remain bright.”