Despite concerns over Brexit and what it might mean for the future of the UK economy, the manufacturing sector continues to put up a strong performance. The final Office of National Statistics (ONS) manufacturing figures for 2016 show that output increased by 2.1 per cent in December.
The latest set of figures were the latest to show an upward turn for the manufacturing industry, and optimism in the sector is at its highest levels for two years, according to data released from the CBI.
The ONS attributed the increase in December’s figures to the performance of the pharmaceutical sector. Industrial output also exceeded expectations at 1.1%, and both imports and exports also showed growth through 2016.
Exports are performing well
A strong performance in exports were also reflected in figures released by the CBI.
A survey of more than 450 manufacturers revealed that exports are growing at their strongest rate for nearly 3 years, and businesses say they are more optimistic about their prospects.
According to the CBI industrial trends survey, UK-based businesses also reported strong domestic orders over the previous quarter.
Commenting on the figures, Rain Newton-Smith, CBI Chief Economist, said:
“UK manufacturers are firing on all cylinders right now with domestic orders up and optimism rising at the fastest pace in two years.
“The weaker Pound is driving export optimism for the year ahead, but is having a detrimental impact on costs for firms and ultimately for consumers.”
SME manufacturers show strong growth
The latest SME Trends survey from the CBI showed new orders growing at their fastest pace since 2015 and manufacturers stated they were optimistic about new orders going forward. However, they did expect to come under strain from pricing pressures in the future due to the low price of the pound.
Industrial strategy gives further boost to manufacturing
The manufacturing sector was also given a boost by the announcement of the government’s industrial strategy. The strategy pledges to support business and encourage trade, while encouraging innovation and providing an effective infrastructure to help businesses succeed.
A strong industrial strategy is something the manufacturing sector has been calling for. In late 2016, a report from the EEF showed most manufacturers aimed to achieve growth, and most of them had a plan in place to do this.
However, the EEF made clear how important it was for the government to have an industrial strategy in place to support this growth if manufacturers are to realise their goals.