A financial services group has claimed that, according to its quarterly index of business turnover, manufacturing industry is driving recovery within the UK and is "already performing above pre-recession levels."
The company, Bibby Financial Services, said that its Business Factors Index, which tracks the turnover of its 3,000-strong UK client base, showed output in the manufacturing industry standing at 121.2 at the end of Q3 2010, the second highest reading since the index began in July 2007 with a base rate of 100.
In light of the strong quarter, business owners and managers in the manufacturing sector are optimistic, said Edward Rimmer, Bibby's UK chief executive. He said that more than a third (37 per cent) of them stated that their business is doing better than 12 months ago, and that 15 per cent feel the UK economy is now demonstrating signs of real recovery – the highest percentage of any sector.
He added that the index's findings are corroborated by the most recent Markit/CIPS UK Manufacturing Index, which reports that manufacturing production accelerated for the first time in seven months in October and that export orders increased at the sharpest pace in five months. Furthermore, the rate of job creation reached a four-month high in October.
"It is clear that exports have been a key factor over the last few months and are boosting growth," he said. "The outlook of manufacturers is positive and this bodes well for Q4 and on into 2011. Manufacturing is key to the UK's continued recovery but we shouldn't be surprised if there are fluctuations in the months ahead.
Bibby reported that, looking to the future, more than two fifths (41 per cent) of those interviewed were hopeful, but that more than any other sector they also demonstrated a reliance on the Government. Indeed, 22 per cent of manufacturers believe more government support, such as the coalition's focus on rebalancing the economy and driving exports abroad, would help stimulate economic recovery.
Edward Rimmer added: "As the Government takes measures to nurture the export market, manufacturing firms must ensure they are ready to embrace new opportunities and have a reliable and flexible source of finance in place that can grow as orders increase."