EEF: Uncertainty overshadows prospects for UK manufacturing

Almost half of more than 200 executives surveyed said they feared the UK economy will worsen this year, with just 21% expecting conditions to pick up. Most firms said they had adjusted their business to respond to the global economic uncertainty and were seeking non-traditional markets for their products and services. EEF chief economist Lee Hopley maintained, however, that there were still some grounds for optimism. She said: "The road ahead for manufacturing and the UK is extremely uncertain but the sector has proved to be agile and resilient through a bumpy recovery and companies are continuously looking for new sources of growth. Most manufacturers continue to grasp the opportunities in untapped markets for services and in faster growing emerging markets." "However, this year won't pass without challenges. Uncertainty about the wider global economy, supply chain constraints and raw materials shortages could impact on production levels and confidence. If we can navigate these hurdles, manufacturing should again play a role in delivering the balanced growth our economy needs." According to the survey, the greatest risk to manufacturers' prospects in 2012 comes from raw materials shortages. Concerns were raised by two thirds of manufacturers about the growing pressure in supply chains and shortages or stretched lead times. The events in Europe and potential knock-on consequences on the UK and on the provision of finance were also seen as major risk by two fifths of companies.