Latest figures from the Confederation of British Industry (CBI) industrial trends survey show that export numbers are up as manufacturers benefit from the weaker pound.
According to the report, the volume of output and orders over the past three months were both up by 9 per cent, with export volumes growth the strongest for two and half years. Competitiveness in European Union (EU) markets rose at the fastest pace (+34 per cent) since the survey series began in 2000, with competitiveness in non-EU markets also improving (+17 per cent) at the highest rate since 2009.
Average domestic prices (+8 per cent) remained above the long-run average (-3 per cent) for a second consecutive quarter, while average export prices stayed flat (+1 per cent).
Commenting on the findings, Rain Newton-Smith, CBI Chief Economist, said: “Manufacturers are optimistic about export prospects and export orders are growing, following the fall in Sterling. However, the weaker Pound is also feeding through to costs, which are rising briskly and may well spill over into higher consumer prices in the months ahead.
“Access to skills clearly remains a high priority, so manufacturers will be looking to the Government to implement a new migration system that meets the needs of business while responding to clearly-stated public concerns. Maintaining a preferential route between the UK and the EU, our largest trading partner, will be important.
"Firms will be seeking further details on a long-term, industrial strategy from the Autumn Statement that combines sectors and places… Ultimately, all businesses need greater clarity from the Government on the fundamental issues of skills and barrier-free access to EU markets as soon as possible.”
With an increase in optimism about export prospects for the year ahead (+9 per cent), the highest since April 2014 (+27 per cent), it is important that business owners look now at ways of capitalising on the upturn.
Our Beavis Morgan specialists to the manufacturing sector are available to assist with business growth and optimisation. What’s more, if your business is undertaking research and development, such as on-going enhancement of existing products or services, you may qualify for cashback through the government R&D tax credit scheme. But don’t delay; with a two-year window to take advantage of these valuable tax relief opportunities, time may be running out for some!