Region’s manufacturers’ strong start to year defies UK gloom

This upbeat scenario locally is in stark contrast to the national picture where a decline in manufacturing was chiefly blamed for the UK economy shrinking in January.

The Make UK/BDO Manufacturing Outlook Q1 survey shows that both output (+28 per cent) and orders (+20 per cent) from this region’s sector were very positive.

And the forecast is set to improve further in the next quarter with forward looking balances of +64 per cent and +44 per cent, respectively – significantly ahead of the national picture.

This reflects the fact that the food and drink sector, which is very strong in the region, is gearing up for production. Make UK says it has also begun to see a pattern of regional variations of increased activity across some areas of the UK which it believes may reflect company behaviour in certain regions in response to the economic shocks of the last few years.

It believes that these variations in regional and sector performance may become normal moving forward.

In response to this positive picture companies are looking to take on more people with recruitment intentions increasing from +20 per cent to +44 per cent in the next quarter. Capital expenditure plans are also ahead of the national picture at +40 per cent.

To build on this buoyant sentiment, Make UK is calling on the Government to bring forward a comprehensive, fully funded and modern, long term industrial strategy which has advanced manufacturing at its heart –something it has committed to do before the summer.

This must be aligned across government to include a defence industrial strategy as well as energy, trade and skills blueprints that demonstrate to business and foreign investors that there is a cohesive plan to grow the UK economy.

Make UK is forecasting that manufacturing will contract by -0.5 per cent in 2025, down from a forecast of -0.2% per cent in the last quarter, before growing by one per cent in 2026. GDP is forecast to grow by one per cent in 2025 and 1.5 per cent in 2026.

Chris Corkan, Region Director at Make UK in the East of England, said: “This has been a strong start to the year for manufacturers in the East of England with the region bucking the national picture.

“To build on this it’s now essential that the Government brings forward an industrial strategy at the earliest opportunity. This will give manufacturers the confidence to plan for the future with a stable, supportive policy environment.”

Peter Harrup, Head of Manufacturing at BDO in the East of England, added: “The economy in the East of England relies heavily on manufacturing, in particular the strength of the food and drink sector. It’s encouraging to see the region have a strong start to the year, but we cannot be complacent – our manufacturers are resilient but they’re not invincible.

“Manufacturers across the East of England now need targeted support from government, whether that be reducing complexity, streamlining trade or boosting access to capital to enable them to focus on growth.”