Growing number of manufacturers 'enjoying buoyant trading'
A growing number of manufacturers are enjoying "buoyant" trading conditions following rising demand in overseas and UK markets, according to a new study.
The Engineering Employers Federation said a survey of almost 550 firms showed that the recovery from recession had gathered pace in the last few months.
The study also suggested that the manufacturing recovery was set to continue over the summer, although the EEF said a package of tax reforms in the Budget later this month would alleviate the concerns of industry.
Chief economist Lee Hopley said: "The steadily improving trends in manufacturing look set to continue in the coming months and the upswing is being felt right across industry.
"Manufacturers are pulling in more export orders on the back of a recovering world economy and a better outlook for the domestic market is giving companies some confidence to recruit again.
"But manufacturers are very aware that economic headwinds could still pick up again as there are still risks to a sustained recovery. Great importance is now being placed on the need to rebalance the UK economy.
"In the short term this requires a Budget which delivers tax reform and deficit reduction in a way which provides some stability and gives manufacturers the confidence to invest."
Tom Lawton, head of manufacturing at BDO, which helped with the research, added: "These are a good set of results, especially as the manufacturing sector is still getting to grips with the uncertainty of the new coalition government."
The report showed that over the last three months both output and new order balances were at record levels, while more firms had recruited staff.
Investment intentions remained "flat", held back by uncertainty over domestic demand and future tax changes as well as lack of finance.
The EEF forecast a 3.5% growth in manufacturing this year and next as output recovers from the depths of the recession.