Manufacturers defy gloom with healthy growth
Britain̵7;s manufacturers are continuing to defy the pervading economic gloom by posting their tenth consecutive quarter of healthy growth in, according to a new survey.
Firms reported a rise in domestic orders for the second quarter of 2008, and they said that export orders remained relatively strong, according the survey by engineering employers̵7; body EEF and consultants Grant Thornton.
However, the research also found indications of a softening in economic outlook, possibly due to weakening conditions in the United States.
The survey did however add to the Bank of England̵7;s concerns about inflation with firms having increased prices and more expecting to do so. In contrast, it also suggests that manufacturers have not been able to pass on all of the cost rises they have suffered and that profit margins have been squeezed.
In addition, higher inflation is not currently feeding into higher wage settlements, with companies bearing down on wage costs to offset increases in other costs.
EEF chief economist Steve Radley, said: ̶0;Manufacturers are providing a beacon of light amidst the current economic gloom and remain cautiously optimistic about their immediate prospects.
̶0;Companies are responding to the squeeze on their margins from rising costs by continuing to invest in their businesses to drive up productivity. However, at a time of heightened uncertainty, the government needs to send a clear message that it will ensure that the UK remains an attractive place to do business."
Image: UK factories have defied recent economic gloom