MANUFACTURERS in the North East have seen a strong performance at the end of the year, according to today's quarterly Manufacturing Outlook survey from Make UK and business advisory firm BDO.

According to the survey, output in the region reached a balance of +62% which was the best performance of any UK region and a very strong figure by historical standards.

The figure was buoyed by strong domestic and overseas orders which were both above the national average and a reflection of world markets which have rebounded very strongly throughout the course of the year. The North East also continues to benefit from significant investment in renewable energy and construction equipment where the region has a strong presence.

As a result of this strong performance, the outlook for jobs across the North East has significantly improved as companies hire to meet demand. The employment balance in the region was +31% which is well above the national average. Investment intentions also increased, possibly in response to the Chancellor’s extension of the Annual Investment Allowance in the Autumn Budget.

As with the national picture, the big challenge for companies, in addition to attracting and retaining talent, remains the escalating inflationary pressures which are forcing companies to raise prices, in many cases significantly.

Make UK has forecast growth for manufacturing in 2021 of +6.9%, down slightly from +7.1%, and growth in 2022 of +3.3%.

Fhaheen Khan, Senior Economist at Make UK, said: “While manufacturers in the North East will be able to enjoy some festive cheer this year, their spirits will be tempered by the eye watering impact of escalating cost pressures.

“Given the global nature of some of these pressures there is little sign that they will abate anytime soon. However, they will hope as we enter a fresh year that these will gradually unwind, with the compensation being that demand prospects among their major markets continue to look strong.”


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